Chinese New Year, the Year of Ox (Bull), is Finally Here as Crypto Market Aims for the $1.5 Trillion Mark
The bullish tailwinds for the Bitcoin market hold strong with negative rates, bond purchases, fiscal stimulus, a weaker dollar, mainstream adoption in this year of bull.
Chinese New Year is finally here. The festival celebrated around the world on Friday marks the beginning of the Lunar New year. The Chinese New Year is also called the Spring Festival.
Each year has an animal sign in the Chinese Zodiac, and this is the year of Ox. As an analyst, Mati Greenspan says, “The qualities of this particular four-legged animal are not so different from those of bitcoin itself,” very slow and steady paced but moves only forward and with a sense of purpose.
The crypto market has already been enjoying an uptrend ever since last year, with the overall market cap ready to hit $1.5 trillion, as per CoinMarketCap.
While Bitcoin seems primed for $50k, the fully diluted market cap of the leading cryptocurrency has already surged past the $1 trillion mark. The reported market cap still has a way to go, as the highest level was hit on Friday at $898 billion.
Going forward, Bitcoin is “quickly approaching the two-year MA multiplier upper resistance, currently at $56k,” as per trader Josh Olszewicz. “Ideally, we tap somewhere near $56k, slow down a bit, reconsolidate at the midline, then make the move past the resistance (ala 2017),” he said.
Bitcoin hit a new ATH at $49,000 this week as the institutional adoption of the market continues to grow with more and more people and companies embracing cryptocurrencies.
The weakness in the dollar also helps the markets, currently around two-week lows after the release of weaker-than-expected weekly US jobless claims data, which is denting investors’ expectations about the pace of the economic recovery. Westpac strategists wrote,
“The U.S. economy will outperform most thanks to fiscal stimulus and faster vaccine deployment, but ongoing reflationary fiscal and monetary policy will leave DXY on a sustained medium-term bear trend.”
This week, as we reported, the Bank of Japan has been signaling its readiness to take interest rates deeper into the negative territory. European Central Bank is also planning to keep the fiscal spending going in 2022.
Federal Reserve Chairman, Jerome Powell, also said on Wednesday that continued aggressive policy support is needed to fix the issues like the dour state of the US employment. Powell said in a speech to the Economic Club of New York,
“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared.”
The Fed has signaled that it expects to hold rates near zero at least through 2023, and Powell repeated that the central bank’s $120 billion monthly paces of bond purchases commitment would also continue until “substantial further progress” is recorded on employment and inflation.