Bitcoin (BTC) continued its fight for support for $ 43,000 on March 24 on Wall Street, amid renewed unrest over US economic policy.

Hourly candlestick chart BTC / USD (bit stamp). Source: Trading View
Kashkari warns against “excessive” hiking
Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD stayed just under $ 43,000 when trading began on March 24.

At the time of writing, US markets continued to stabilize for the first hour, which was particularly interesting for bitcoin traders given the significant positive correlation between bitcoin and equities. This week it emerged that the correlation between BTC / USD and the S&P 500, for example, reached its highest level in almost 18 months.

The focus that day was on the Federal Reserve. In a well-publicized question-and-answer session, Minneapolis Fed President Neil Kashkari said there could be as many as seven major rate hikes this year.

He explained that while this may not be all that is needed, the Fed needs to tackle inflation.

There is a risk of exaggerating it. “We want information,” Reuters quoted him as saying.

Market monitor Holger Schaepitz said that attempts to tighten monetary policy have shown an impact on the bond markets, which have fallen 11% from all-time highs, the largest decline since the global financial crisis in 2008.

Mike McGlone, head of commodity strategist at Bloomberg Intelligence, added in a Twitter post that Bitcoin, for its part, may face “headwinds”.

He wrote: “Long-term risk assets may struggle with the Fed, one of the most risky bitcoin to face headwinds when expectations of interest rate hikes rise.”

“As in 2020, when trading on the decentralized crypto network was relatively steady compared to stock futures stalls and ceilings, Bitcoin is proving its worth.”
The attached chart showed, as McGlone warned, that this may be a repeat of the 2018 bitcoin bear market – prices are rising while BTC / USD is falling from general highs.

BTC / USD futures chart against FB. Source: Mike McGlone / Twitter
The Bitcoin price goes back to the large moving average
As Cointelegraph reported, Bitcoin’s price movement during the week was supported by high-profile purchases from the Terra blockchain protocol.

Related: Bitcoin Can Easily See $ 30K With Stocks Due To 30% Fall In 2022 – Analyst

It was originally intended to buy BTC for $ 3 billion, but the first three transactions of $ 125 million each coincided with a BTC / USD rally of more than three weeks.

However, the purchase has been questioned by some, including statistician Willie Wu, who argued that the size is unlikely to make any significant difference given Bitcoin’s liquidity.

Traders that day, however, were noticeably more confident as Bitcoin closed above its 100-day moving average for the first time in almost four months.

Source: CoinTelegraph

LEAVE A REPLY