Last Thursday witnessed Bitcoin visit its highest level in the week when it touched $52,700, but the Bitcoin rally did not continue after that as the price fell to 51,650 at the present time after a strong attack from bears and miners.
The digital currency market showed signs of fatigue among bulls in trading on Friday, when the largest currency in the crypto market lacked sufficient momentum to break the $53,000 level and close above. This coincided with the release of higher-than-expected inflation data, which prompted investors across the financial markets to re-evaluate their plans to move forward. Go ahead now as it looks like the Fed may not cut interest rates until June at the earliest.
“Inflation has been hot over the last few months,” said Victoria Bales, Banrion Capital Management co-founder and chief investment strategist, in a conversation with Kitco Crypto. “Before, the way people valued financial markets didn’t take inflation into account, because we didn’t have to worry about interest rates. But now that we have high interest rates, the PPI and CPI are very important for people to understand.” When will interest rates fall?
“The broader market expectation is that everyone, at least when it comes to bankers and people on Wall Street, actually wants interest rates lower, because that means the cost of borrowing and the cost of lending will go down dramatically,” she said. . “This means they can lend capital at lower interest rates, enabling them to help circulate money in the economy more freely.”
Stocks oscillated between positive and negative territory on Friday, but eventually succumbed to the negative expectations sweeping the market. At the closing bell, the S&P 500, Nasdaq and Dow Jones were in the red, down 0.48%, 0.37% and 0.82%, respectively.
Bitcoin price…will it start falling?
Data shows that Bitcoin has continued to trade sideways in a range between $51,600 and $52,620, with bears slowly reducing the power of the bulls as they look for BTC to fall below $50,000.
As the market enters a consolidation phase, Michael van de Poppe, founder of MN Trading, said: “The ultimate question is what will the price of Bitcoin do in the coming period?”
He continued: “The price of Bitcoin has been accelerating. Before the ETF was created, there was a rise from $25,000 to $49,000. Since then, sentiment has quickly turned towards a very negative sentiment indicating that the markets were forced to drop to $30,000 due to the inflow of GBTC into “However, markets retreated from $39,000, indicating significant interest in spot Bitcoin ETFs, leading to a peak at $53,000 and a steady inflow.”
Bob warned that making trading decisions based on sentiment is risky because “sentiment is always the wrong indicator.”
“The strength of the markets is reflected in the actual price movement, and it always exceeds sentiment as emotions are reflected in scenarios, which is why emotions have a bad impact on trading/investing,” he said. “Emotions always outpace reality, and emotions outpace price action by a mile, which is why people start losing money. Markets are pricing in events all the time, whether you like it or not.”
Based on this understanding and Bitcoin’s current price action, Pope said the “rigorous and relatively simple” game plan moving forward should include a trading plan and an investing plan.
“Ultimately, trading is determined by the horizon over which you look to hold the asset (including the time frames you use for your analysis),” he continued. “If your horizon is relatively short, it may not be +EV to buy an asset that has risen in value 35% in 10 days (Bitcoin). The same is true for swing trading purposes.
“Let’s assume the risk of a correction has increased,” Bob said. “If you believe that a correction to $45,000 has a 30-35% chance, while a potential rise to $60,000 has a 60% chance, it may be possible to take the trade. If the market makes a 20% correction from $55,000 To $46,000, the odds of an upward movement versus a downward continuation shift in favor of buying. This is the methodology to focus on when it comes to trading.”
Your investment plan “depends on your risk appetite and horizon,” he said. If you want to start investing, I would suggest waiting for a record 20-40% correction to occur on Bitcoin. It will cover some important points: Buy corrections (reverse sentiment at that point) And the ability to control those feelings.
“However, if your horizon is 2-3 years from now and you expect to see Bitcoin price at $150,000+ in that window, it wouldn’t be a big problem to start scaling at those prices,” he added. “Once again, there is more confirmation of markets entering a correction than an uptrend.”
With his personal forecast, Pope said that recent macroeconomic events, including the CPI and PPI reports, “suggest we will see a correction.”
He said multiple factors could lead to this outcome, including reduced flows into Bitcoin ETFs or the sale of Bitcoin by “other parties participating in markets outside of the ETFs,” which could lead to a “shift in sentiment and significant volatility.” . revision.”
“These corrections, given current sentiment, will be rapid,” he warned. “I don’t know exactly where that will come from, but given the data, it’s reasonable to suspect that the markets will peak between $53-58K and will have a 20-40% correction from there.”
“Whether that will happen in the coming weeks, or in March, I don’t know,” Pope concluded. “What I do know is that markets are moving normally and seeing those corrections, despite the overall sentiment.”
2024-02-19 10:37:41
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