Bitcoin (BTC) is still consolidating around $39,000 despite a dip last night. However, this week could be very exciting with a number of important developments that may have a major impact.
Bitcoin price dips and recovers
From bitcoin price hovered just above $39,000 since Thursday. However, bitcoin dipped slightly to $38,500 yesterday afternoon, but then immediately recovered back to $39,000.
Last night, the price lost traction again at $39,000 and by midnight bitcoin plummeted all the way to $37,7,000. That in turn was accompanied by a significant liquidation of long positions, amounting to about $50 million in the past 12 hours according to Coinglass.
Recently, purchases have been made more often around that price, which is why bitcoin was able to recover immediately. Bitcoin encountered some resistance around USD 38,000 and USD 38,500 during the recovery, but quickly broke through. This morning bitcoin is back at $39,000 on Binance and €35,600 on Battle.
European PoW ban back
A new European bill recently included a ban on proof-of-work (PoW) crypto als bitcoin en ethereum (ETH)† After a significant backlash, this ban was removed from the text of Markets in Crypto Assets (MiCA).
However, this ban appears to have returned in a slightly lighter form. The new text exempts small-scale PoW networks anyway, but large networks may be forced to switch to a less energy-intensive protocol such as proof-of-stake (PoS).
Ethereum plans to switch anyway, but for bitcoin this will be virtually impossible. The European Union will vote on this later today and concerns are running high. In the meantime, we see that a lot again fear, uncertainty, doubt (FUD) is distributed over bitcoin-miningaccompanied by a lot of misinformation.
The proposal to ban PoW protocols like #Bitcoin and in the #MiCa bill is more than just bad news. It is a thoughtless, uninspired proposal that does not reflect the realities and the future of the industry.
A long 🧵 (1/23) – All credits to our @CoinSharesCo research team.
– Jean-Marie Mognetti (J2M) (@jmmognetti) March 13, 2022
China back in lockdown
In addition, China may go back into lockdown† Infections with the Omikron variant of the coronavirus are increasing rapidly in China. A full lockdown could have a major impact on the economy, even outside of China. Currently, the correlation between bitcoin and traditional risky financial markets is still very high.
FOMC meeting this week
Finally, the next Federal Open Market Committee (FOMC) meeting will take place tomorrow and the day after. After that, the Federal Reserve will likely announce the percentage by which US interest rates will be raised. This is currently gripping the financial markets. Despite this, meanwhile, the Fed is expected to exercise restraint in its measures due to the war in Ukraine.
Risk of outbreak increases
Coupled with the above developments, and bitcoin moving ever tighter around $39,000, the chances of seeing a breakout in the coming days seem to be increasing rapidly. However, opinions are very divided on which direction this outbreak will take. Should bitcoin break out higher, hopes are that USD 42,000 will now flip from resistance to support† Should bitcoin break out lower, hopes are that the area will hold between USD 33,000 and USD 36,000. Still, some analysts are also talking of a possible dip to $29,000 or even $27,000
#Bitcoin Update.
I’ve had a few days off and sentiment seems to be even worse now! Looking at the charts though… nothing has happened. 🤷♂️
Certainly a move is coming soon…
🧵1/7 pic.twitter.com/B9qHv56S6y
— Steve ⚡ (@decodejar) March 14, 2022
⚠️ Very Important Post
The floor #Bitcoin price of the accumulation phases was within 0-29 days, of the last 3 crosses🚩
We had a cross 9 days ago, will history repeat? #Crypto
Last 3 times, resulted in a #BTC price drop to my Confluence Floor Model, currently at $26,820. pic.twitter.com/pcB3UgknUz
— Plan©️ (@TheRealPlanC) March 13, 2022
Meanwhile, there are also still very positive signs for bitcoin. For example, the supply of BTC on the exchanges continues to decrease, a very bullish signal for the course. Also, the Terra (LUNA) project plans to buy a whopping $1.2 billion worth of BTC this week.
#bitcoin balance on exchanges making new lows 👀 pic.twitter.com/zgqfSMNuoZ
— Philip Swift (@PositiveCrypto) March 14, 2022
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