Bitcoin (BTC) hit a new high over the weekend in the latest episode of its impressive upward trajectory in 2021 – what’s next for treats?
With the largest cryptocurrency approaching $ 60,000, Cointelegraph is looking at the factors to consider when forecasting price action this week.
The investor expects to “reset” the stock market
On Monday, the stock showed no signs of endless growth as buyers continued to enter the market.
Despite warnings that the bubble might indeed burst, markets built in the midst of the anticipation of a global recovery have sparked enthusiasm.
In the US, there was hope for a $ 1.9 trillion coronavirus stimulus package proposed by President Joe Biden that continued to serve as a basis for growth. Last week, Treasury Secretary Janet Yellen suggested that Congress shut down the cash mechanism, which would include a third round of $ 1,400 incentive checks, in the coming weeks.
“Everyone is playing with the prospects for better economic growth, and the potential for more financial stimulus,” Adrian Zwercher, head of global asset allocation at UBS Wealth Management, told Bloomberg.
“Naturally, nominal interest rates are heading higher, stocks are also trading higher, and commodities are also on the best economic outlook.”
While Bitcoin rose alongside stocks after the March 2020 crash, not everyone was optimistic.
In new comments Monday, investor and hedge fund manager Michael J. Perry offered a stressful outlook for the global economy, saying there was reason for a major correction in stock markets.
“People say I didn’t warn for the last time. I warned, but nobody listened. So I warn you this time. However, no one is listening. But I need the evidence I warned you about,” he tweeted.
Katie Wood, chief information officer and chief executive officer of Ark Invest, told CNBC that the “downgrade” was likely the result of continued price increases.
Without a specific timeframe, there was clearly a risk that March would repeat itself in March of last year, eventually surpassing both Bitcoin and Ether (ETH).
The dollar inflates death
Meanwhile, any short-term continuation of Bitcoin could be reversed due to the moderate behavior of the US dollar index (DXY), which has declined in recent days.
Traditionally, DXY’s recovery has put downward pressure on the BTC / USD pair, and the index spent most of February falling.
According to Cointelegraph, long-term projections indicate that the dollar as a whole will weaken over time thanks to the massive increase in the money supply from the Federal Reserve.
“The dollar has much more room to fall, and our long-term outlook is dollar weakness, not strength,” Standard Chartered head of research Steve Englander told Reuters in early February.
An accompanying survey showed that only 13% of respondents showed a three-month appreciation in the US dollar, and the vast majority expected a loss or stagnation in value.
“A large part of the exclusivity of the dollar has to do with deficits,” Englander added.
“The expectation now is that there will be no shortage of dollars, but in reality there will be an abundance as far as the eye can see.”
Flood leads inland with whale sell warning
For Bitcoin, there are signs of a possible pullback in the form of an increase in exchange flow on Monday.
As chain monitoring supplier CryptoQuant notes, Enterprise-focused Gemini has seen massive total inflows of 280,000 BTC ($ 1.63 billion), indicating that a large investor is planning to sell or prepare money for sale should prices drop.
“Beware the downside of drowning whales,” CryptoQuant added in comments to Telegram subscribers.
Cointelegraph reported last week that the stock market balance peaked after BTC / USD and reached a new high of $ 58,312 on Bitstamp. This was at a time when the so-called Coinbase premium – the price difference between Coinbase and Binance – was negative.
For CryptoQuant CEO Ki Yong Joo, the win was a concern, despite the resulting euphoria.
“The only thing that makes me uncomfortable with the increase in $ BTC is the negative Coinbase premium,” he tweeted.
It appears that purchasing power is not coming from American institutional investors, but from sedentary whales and private investors. Not a healthy bull without an immediate stream of USD. “