Bitcoin Enters Consolidation Phase, More Losses Are Not Out of the Picture
The cryptocurrency market is enjoying the greens this week. Bitcoin even managed to surge past $50,000 on Monday, but today we are back around $48,000.
DeFi coins are the ones leading the recovery with notable gainers, including BADGER (52.87%), ALPHA (22.52%), COMP (19.68%), SUSHI (18.37%), LINK (12.61%), SNX (11.60%), and UNI (10.26%).
The total crypto market capitalization has also reached $1.5 trillion yet again.
Trader and economist Alex Kruger expects it to be a bounce week and the FOMC meeting next week to be uneventful. For him, new highs in the stock market will keep the leading digital currency in the $45k-$55k range, experiencing a continuous up and down.
Kruger further expects yields to start spiking again in late March, which sent both stock and crypto markets crashing last week, which means April will be risk-off. But of course, the Federal Reserve will intervene, and as they get forced to calm the markets, risk-on sentiment will return in May.
“Bull market continues with panic bursts,” he said. This also coincides with Bitcoin’s March seasonality which has historically resulted in a red month for prices.
Trader Smart Contractor is of a similar opinion, and over the next couple of weeks, he expects another leg down which would take Bitcoin’s price in the range of $32,400-$38,200 and $1,000-$11,000 for Ether prices.
“Essentially expecting this coming week to retrace some of the inevitable weekly engulfing before a further final leg down,” he said.
Despite all the deep pullbacks that Bitcoin experiences time and again, the digital asset remains the undefeated winner of the best performing asset in financial history. Bitcoin's CAGR also dwarfs other benchmarks over any multi-year period in the past decade.
While the prices are feeling the pressure after a wild rally, the institutional support for the leading digital currency continues to grow.
Cboe Global Markets seeks approval to list and trade shares of VanEck Bitcoin ETF, which could be the first Bitcoin exchange-traded fund (ETF) in the US, according to a Monday regulatory filing.
As we reported, Citigroup’s strategists are saying that Bitcoin is at a tipping point and that it could become the “currency of choice for international trade” in the years ahead.
Another bullish news came in the form of Goldman Sachs restarting its trading desk for cryptocurrencies to offer Bitcoin futures among other products by mid-March.
MicroStrategy meanwhile has purchased an additional 328 BTC, increasing its Bitcoin stash to about 90,859. This brings the company's holdings worth over $4 billion.
Not to mention, Dan Loeb, head of Third Point LLC, has been “doing a deep dive into crypto lately,” calling it “a real test of being intellectually open to new and controversial ideas.”
“The more banks that come out with constructive comments on Bitcoin, the more likely the speculative bubble will continue to grow,” said Ed Moya, senior market analyst for OANDA.