(Kitco News) Regarding Bitcoin price behavior, the macroeconomic situation is currently in the driver’s seat, said Marcus Sotiliu, an analyst at GlobalBlock.
“The Federal Reserve and the stock market have the biggest impact on Bitcoin prices. The macro is very in the driver’s seat at the moment. The classic phrase is not to fight the Federal Reserve. And all eyes are The Fed is paying close attention to the action. “
This is still a new relationship for Bitcoin, which is accustomed to mass adoption to control its own economy and price. However, due to the hawkish Federal Reserve outlook and the significant stock sellout, Bitcoin’s record high of $ 69,000 has fallen 50%.
In January, Bitcoin fell to a low of $ 33,000 and is on track for the worst start since the 2018 cryptocurrency winter. At the time of writing, Bitcoin was trading at $ 38,436.28, up 1.5% on the day.
According to Sotiriou, cryptographic transactions will remain volatile for the next few months. “Financial institutions will strive to protect themselves from the March rate hike,” he said.
As the Federal Reserve focuses on fighting inflation, market participants will continue to discuss how many rate hikes are needed to curb 40 years of high inflation in the United States.
“Inflation is now the Fed’s main concern, and Fed Chair Jerome Powell is very clear. He always knew that a March rate hike would come. Powell said inflation was higher than in December. He emphasized that it is getting worse. He is suffering from poor ratings and his main concern is to sort out supply chain issues. ” “It’s still unclear if the rate hike will double in March, but if people realize that the Fed’s rate hike doesn’t make much of a difference, the crypto market’s upward trend could resume.”
That’s why the long-term outlook is still “very bullish,” Sotiriou added. “Historically, when the Fed raised rates, the S & P 500 was on average strong. The rate hike could impact economic growth, but the crypto market doesn’t really correlate with it. The crypto sector has its own economy in a way. “He said.
Regular crypto drivers will help support prices later this year, including the mass adoption of crypto technology. Moreover, as the Bitcoin market matures, this correlation between crypto and equities becomes even weaker.
“As time goes on and more institutions are involved, the impact of this type of correlation diminishes. Increasing adoption drives it. Currently, the two most employed are games and the Metaverse. There are two sectors, “Sotiriou pointed out. out.
Other drivers supporting Bitcoin will be positive headlines, such as Russia becoming more friendly to crypto mining and the Turkish government meeting El Salvador.
“Russia has many advantages in adopting or regulating cryptocurrency mining. We see game theory taking place. Countries that do not accept or ban bitcoin are different from accepting bitcoin. Its economic value may be transferred to the country, “explained Sotiriou. “It wouldn’t be surprising to see other South American countries adopt Bitcoin this year. Rio de Janeiro of Brazil has allocated 1% of its reserves to Bitcoin. Accepting Bitcoin and this technology Anticipating a revolution can be a very tactical move. “
Also, in the last two weeks, companies such as Twitter, Facebook, Instagram and YouTube have announced integration into the NFT platform. “It shows that mass adoption in the field isn’t too far away,” Sotiliou said.
One downside risk remains regulated, as the United States is very strict about cryptocurrency regulation. “SEC Chair Gary Gensler is very enthusiastic about regulating many DeFi spaces. We haven’t seen it happen yet. With the Fed’s attention, people may have wiped it out. But that’s it. There are many potential causes. At some point this year, uncertainty has increased. “
Bitcoin price level
Bitcoin currently has a wide trading range between $ 29,000 and $ 69,000. Bitcoin was the best ever at the end of November. And now it is trading near the bottom of the range.
“For now, Bitcoin has found a low of $ 33,000. It has a lot of support between $ 29,000 and $ 33,000. This is one of the main reasons for seeing big bounces from that level. We expect the level of $ 29,000 to $ 33,000 to be maintained. “
The resistance is currently between $ 41,000 and $ 42,000. “It was the highest range in the summer of 2021. It’s a resistance to overcome in the future. Overcoming it may turn the short-term trend into an upward trend,” he said.
GlobalBlock’s year-end forecast predicts that Bitcoin will reach a record high of $ 80,000 to $ 90,000 and Ethereum will surpass Bitcoin, surpassing $ 5,000 and rising towards $ 7,000.
Disclaimer: The views expressed in this article are those of the author, Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided. However, Kitco Metals Inc. Neither the author nor the author can guarantee such accuracy. This article is for informational purposes only. It does not solicit the exchange of commodities, securities or other financial products. Kitco Metals Inc. and the authors of this article are not responsible for any loss and / or damage resulting from the use of this publication.
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