Bitcoin (Bitcoin) to start the week below $30,000 as the battle to rescue the market from new lows continues.
After reaching the highest level since Terra Luna After crashing last week, the largest cryptocurrency still failed to reclaim $30,000 as support.
What might this week be? This week, ahead of the World Economic Forum, the odds of a major upheaval among macro players, especially the Federal Reserve, are changing.
Meanwhile, internal crypto market pressures remain as the effects of the LUNA debacle continue to unfold.
Cointelegraph looks at five potential BTC price movers in the coming days.
Record weekly decline greets bulls
Traders’ caution was evident this week after upending market expectations over the past seven days.
When blockchain protocol Terra’s LUNA and TerraUSD (UST) tokens imploded, their declines rebounded across the crypto market, and Bitcoin was no exception.
after falling close to its actual price Just under $24,000, BTC/USD saw some sort of V-shaped rally over the next few days, rallying above $31,000. However, that power now seems limited as $30,000 proves to be the stubborn level to win forever.
While the picture looks noticeably more reassuring than the situation for some altcoins, traders are staying away from any firm bullish prices.
A key narrative gaining traction revolves around current levels that form the basis for a relief rally that will eventually not only end in rejection, but attack lower lows than last week.
This is the best case for me #bitcoin Due to rejection and 3 waves of confirmation.We either make a new low from here or complete a C wave flat and rise again
If you are a scalper, this will be your heaven for the next few days pic.twitter.com/LNvVbpXPG6
— Crypto Tony (@CryptoTony__) May 16, 2022
“As our bulls have battled the trend over the past few weeks, I think the bears will deny or reject any more upside,” popular Twitter account IncomeSharks said In two recent articles on the BTC/USD outlook.
it Add to However, those who are only starting to be bearish now will be “falling into their bias”.
Meanwhile, trader Crypto Tony said With the former marking the high of this week’s range, the pair needs to reclaim $31,000, not just $30,000, to continue higher.
Zoom out and the picture doesn’t look nearly as volatile as hourly or daily timeframes.
Weekly BTC/USD chart closes with seventh straight red candle on May 15 despite modest recovery – the first time in history Such an event happened.Closed the week around $31,300, data from Cointelegraph Market Pro and Transaction view show.
Considering whether the long-term downturn will last longer—even beyond 2022—Twitter account Nunya Bizniz noted that Bitcoin has historically been well below all-time highs due to the block subsidy halving.
Therefore, BTC/USD trading sharply below $69,000 at the next halving in two years’ time would be in line with historical precedent.
At the time of the halving, the price was already well below ATH.
let me ☹️
Is it different this time? pic.twitter.com/gQlQCEbW4w
— Nunia Bizniz (@Pladizow) May 16, 2022
DXY won’t quit as Davos nears
Last week, the Fed grappled with inflation, rate hikes and geopolitical conflict, all of which, ironically, Terra overshadowed almost immediately.
By contrast, no such major announcements are expected this week, but underlying tensions have not gone away.
As such, the Russia-Ukraine war, inflation, and measures to mitigate it remain top priorities for central banks around the world. With the 2022 event set to kick off on May 22, this will no doubt be a major theme for the World Economic Forum.
The forum, and the possibility of positive and negative Bitcoin-related voices from attendees, will follow another conference this week in El Salvador, where representatives from 44 countries will discuss Bitcoin.
“Tomorrow, 32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, the digital economy, banking for the unbanked, the launch of Bitcoin and its benefits in our country,” President Nayib Bukele comfirmed May 15.
At the same time, the dollar refused to exit as it strengthened against the currencies of its major trading partners.
Despite the partial consolidation phase, the U.S. dollar index (DXY) remains in a solid uptrend, denying bears a macro top in recent months.
The DXY hit 105 on May 9, the highest since the week of December 9, 2002.
“Meanwhile, EUR/USD is testing its 5-year lows,” analyst Blockchain Backer tweeted. Wire Regarding the macro environment related to encryption.
“The euro is a major component of the U.S. dollar currency index (DXY) and has historically moved against the DXY.”
Blockchain Backer believes that DXY has traditionally also weighed on stocks and crypto markets, but the latter still shows the corrective structure that has been seen in bear markets.
“So, we have a lot going on here. Dow Jones fell below support last week. DXY at 20-year high. EUR/USD finds support. Altcoin market and Ethereum have a similar corrective structure. Turns like it’s flying,” the thread continued.
Tether climbs back from 5% depegging
Regardless of upcoming events, what haunted markets on Monday was the specter of last week’s chaos.
The aftermath of Terra’s UST and LUNA token crash is not yet fully understood, as data continues to flow in about the crash and the company’s plans to mitigate the impact.
Some facts seem clear, but not yet official confirmation, such as the massive sale of Luna Foundation Guard (LFG) BTC reserves.others stay rumorespecially the mass bankruptcy of organizations with LUNA and UST risks.
What happens next is equally unclear, as Blockchain Backer points out, no one knows for sure if the sell-off is complete.
“Last week, LUNA and UST suffered a devastating blow. We don’t yet know the complexity of this and who has suffered collateral damage from it,” it said. Summarize.
“Has any other treasuries been affected by this? Has LFG sold all of its bitcoin reserves, or is there more left? We don’t know.”
However, the focus is not just on UST, but on the largest stablecoin in the industry by market cap. Tether (USDT) saw a slide against the U.S. dollar last week, and while there is no sign of repeating the UST performance, 1 USDT is still not exactly equal to 1 USD as of May 16.
“When TerraUSD (UST) fans started to suffer, it started off with a small slip and then got out of hand,” Blockchain Backer added.
as Cointelegraph reportTether’s creators have loudly defended USDT’s ability to weather the storm because its structure is fundamentally different from UST and algorithmic stablecoins in general.
“In the next few weeks, as reports of major losses and crashes emerge, we will begin to understand the full extent of the losses,” cryptocurrency trading firm QCP Capital told Telegram channel subscribers in its latest update on May 13.
“Despite the carnage, we are encouraged by the resilience we are seeing in specific crypto spaces.”
LUNA keep watching uncontrolled fluctuationsit is nearly impossible to chart on any time frame, and at the time of writing on May 16, Bitfinex was trading at 0.00023.
Analyst: Institutions step up buying
Anyone buy bitcoin? Data suggests that the answer to this is a firm “yes” for certain segments.
exist analyze Published on May 16 by Ki Young Ju, CEO of analytics platform CryptoQuant, he highlighted institutional investor interest as a key phenomenon for Bitcoin’s price between $25,000 and $30,000.
Ki explained that while the LUNA debacle forced bids down to $25,000, overall bids remained the same for a year. Not only that, but these bids can now mitigate the Terra-related sell-off.
“If you look at Coinbase’s heatmap of BTC-USD orders, it’s a pretty thick wall of buying since the last bear market in May 2021,” he noted.
“I think institutions tried to stack $BTC from $30,000 but had to rebuild the bid wall at $25,000 due to unexpected LFG sell-off.”
The accompanying chart shows how the events on Coinbase unfolded, and Ki said the exchange received a large amount of Terra-related funds for sale.
as Cointelegraph reportMeanwhile, the world’s first bitcoin spot price exchange-traded fund (ETF) added a record intraday amount of BTC to its assets under management last week as two Australian ETFs began operations.
Bitcoin Address Growth vs. Emotional Dilemma
It may not be surprising that crypto market sentiment remains subdued.
Reflecting nervousness about price stability, Crypto Fear and Greed Index This week at 14/100 in “extremely fearful” territory.
After hitting historic bottom territory last week, the recovery was notably less robust than the initial decline, with the index falling from 27/100 to 10/100 in five days.
Behind the scenes, however, everything may not be as bleak as it seems.
data Amid the chaos, unique bitcoin addresses continue to grow, according to research from on-chain monitoring firm Santiment last week.
“The silver lining for the -33% drop over the past 3 weeks is that address activity for $BTC has remained steady,” it wrote in a Twitter comment.
“The difference between addresses and prices is at its highest level in 16 months.”
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