Investors in the region were more risk averse this week amid further evidence of the US central bank’s commitment to hawkish monetary policy and an unstable macroeconomic environment; cryptos were mixed.
Hello. Here is what happens:
Price: Bitcoin and Ether have remained roughly stable over the past 24 hours.
Insights: Bitcoin underperformed major Asian stock indices amid investor concerns over interest rate hikes and uncertain macro conditions.
Technician’s View: Range-bound price action could persist for a few days.
Bitcoin (BTC): $43,544 -0.3%
Ether (ETH): $3,227 + 0.7%
|Ethereum Classic||ETC||+10.0%||Smart contract platform|
|Stellar||XLM||+2.4%||Smart contract platform|
|Polygon||MATIC||+1.9%||Smart contract platform|
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Bitcoin did a little better on Thursday after falling the previous day, but still fell slightly, trending lower for much of the week. Ether fared slightly better, but other major altcoins were mixed.
Bitcoin, the largest crypto by market capitalization, was recently trading at around $43,500, roughly where it was 24 hours earlier and well above the $47,000 threshold it broke there. It’s been a week as investors continued to digest new hawkish intensity from the US central bank and the ongoing whirlwind of economic events stemming increasingly from Russia’s invasion of Ukraine.
“Bitcoin struggles to orient itself as Wall Street becomes cautious about the aggressiveness of the [Federal Reserve] will be with a tightening of monetary policy,” Edward Moya, senior market analyst for the Americas at Oanda, wrote in an email.
SOL and AVAX have recently risen around 2% and 3%, respectively, after spending parts of Thursday in the red. Terra’s Moon (LUNA) recently dropped by more than 4%. The same DOGE and SHIB parts were both roughly flat. Outside of the CoinDesk top 20, CAKE was up over 6% at one point.
Cryptocurrency prices deviated slightly from the performance of major stock markets, which were in the green, albeit barely. The tech-focused Nasdaq rose less than a tenth of a percentage point.
The U.S. central bank has signaled forcefully as a body and through individual governors over the past week that it will step up its efforts to rein in inflation, which has hit nearly 8%, a four-decade high.
St. Louis Federal Reserve Chairman James Bullard told reporters after a speech on Thursday that the Fed should “move outright to bring the key rate back to the right level to deal with the inflation we have in front of us “. from U.S. His remarks followed two days after Fed Governor Lael Brainard, who had been reluctant to abandon the Fed’s dovish stance in recent years, suggested the Fed could raise interest rates at a faster pace. .
Other winds of the day blew more favorably for digital assets. Addressing Crypto In a first-time speech, US Treasury Secretary Janet Yellen said a digital dollar could become a “trust currency comparable to physical cash.”
Speaking to attendees at an American University event, Yellen highlighted the different perceptions of cryptocurrency, saying that’s often the case with “transformative” technology. “Some proponents talk as if technology is so radically beneficial and so beneficial that the government should step back and let innovation take its course,” she said. “On the other hand, skeptics see limited, if any, value in this technology and related products and advocate that the government take a much more restrictive approach. »
Meanwhile, EU and US lawmakers who criticized Russia’s unprovoked attack on Ukraine were considering and advancing new economic sanctions. They included a European Union ban on Russian coal and a United States House vote to remove Russia’s privileged trading status and halt imports of energy products.
Still, Oanda’s Moya was cautiously optimistic about Bitcoin’s near-term performance.
“Bitcoin has held up well given the recent bond market selloff, but it could struggle if this move continues,” he said. “Bitcoin’s long-term outlook remains optimistic, but if risk aversion runs wild, it could be vulnerable to a drop towards the $38,000 level. »
S&P 500: 4,500 +0.4%
DJIA: 34,583 +0.2%
Nasdaq: 13,897 +0.06%
Gold: $1,931 +0.3%
Bitcoin Set to End Week Underperforming Major Asian Stock Indices
Worries over a hawkish Fed response to inflation, the ongoing war in Ukraine, and China’s COVID-19 crisis have sent Asian markets tumbling this week, and bitcoin with them.
Hang Seng and other indices (TradingView)
The world’s largest digital asset is expected to end the week down 8%, underperforming major Asian indices including the Nikkei 225, Hong Kong Hang Seng Index, Hang Seng Index of Hong Kong-listed Chinese stocks. Kong, as well as the S&P 500.
Analysts identified uncertainty, rooted in anticipation of the Fed’s final minutes, as a reason for the week-long drop. The Fed now has a mandate to control inflation, but the question is how well it will tolerate the economy plunging into a recession.
In February, a number of analysts who previously spoke with CoinDesk said the Fed would forgo tighter monetary policy if the economy cools too much, too quickly, and stocks crash. These observers thought the Fed could tolerate a decline of around 20-30% in stock prices.
At the time, the central bank seemed inclined to raise interest rates in small increments of 0.25 and only one percentage point over the rest of 2022, an “insignificant” amount according to one analyst, with inflation of 7% at the time.
Today, with inflation approaching 8% and an increasingly uncertain macroeconomic environment due to the Russian invasion of Ukraine, the Fed has signaled that it could be more aggressive in its anti- inflationary.
How his approach affects cryptocurrency is uncertain in the long term. For now, investors seem more risk averse, which is bad news for bitcoin.
Bitcoin’s collapse on Fed warmongering after a brief rally was felt across the cryptocurrency ecosystem as traders who bought tokens including DOGE and SOL trended up and down in sync with bitcoin, rekt went into a massive sell-off with over $400 million lost.
With bitcoin’s continued correlation to the S&P 500, the big question for traders in Asia is what will break this trend? When will bitcoin rise again?
Galaxy’s Mike Novogratz thinks it’s all on the shoulders of the Fed. Novogratz still thinks bitcoin will eventually hit $500,000 and then $1 million, but it will pull back until the Fed takes its hands off the economy when it eventually slows down.
Next, “Bitcoin goes to the moon,” Novogratz said.
Bitcoin’s daily chart shows support/resistance, with the RSI at the bottom. (Damanick Dantes/CoinDesk, TradingView)
Bitcoin (BTC) is stabilizing after falling nearly 10% from the $48,000 resistance level earlier this week. The cryptocurrency is holding support above $43,000 and has been roughly stable over the past 24 hours.
The Relative Strength Index (RSI) on the intraday charts is rising from oversold levels, which could keep short-term buyers active during the trading day in Asia. On the daily chart, however, the RSI is neutral with negative momentum, suggesting range-bound price action could persist for a few more days.
BTC will need to take a decisive step above $45,000 in order to achieve upward price targets, initially towards $50,966. For now, the price recovery from the January low at $32,933 remains intact, especially given the positive momentum displayed on the weekly chart.
Still, indicators on the monthly chart suggest that the upside is limited for BTC over the medium term. This means that BTC will need to maintain stronger support above $37,560 to hold the 3-month uptrend of lower price stable. A decisive break below this level could invalidate the recovery phase.
The chart below shows the key levels to manage short-term risk, according to the DeMARK indicators, available on Symbolik.
Bitcoin daily chart shows DeMARK setups with MACD at the bottom (Damanick Dantes/CoinDesk, DeMARK Symbolik)
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