Bitcoin (BTC) starts the new week with a bang, but not in the right direction for the bulls.

However, on a promising weekend, the BTC / USD pair attracted “outside business” warnings of false price movements, and it was just in time for the end of the week to send the pair down more than $ 1,000.

At $ 37,900, this closeness was not enough to meet analysts’ demands, thus continuing the well-known, range-limited Bitcoin behavior that has been on display throughout January.

Therefore, many have a question: what will change the status quo?

In the absence of any real improvement in the spot market, despite reliable network data, this may be an external catalyst that will eventually lead to change. For example, a US order to regulate cryptocurrency should be issued sometime in February, although the exact timing is unknown.

The US Federal Reserve is another area of ​​interest for analysts, as signs of inflation, rising interest rates or falling asset purchases could have a major impact on the traditional markets to which bitcoin and altcoins remain closely linked.

In the disappointing times of the first month of 2022, Cointelegraph reviews the state of the market this week.

We have identified five things to consider when designing the next steps for Bitcoin.

“Cluge” holds on to the weekly closing of BTC
Even the minimal gains at the end of the week were a short-lived reason for the Bitcoin bulls to cheer on Sunday.

At midnight UTC, a bounce light immediately appeared as BTC / USD fell to $ 36,650 on Bitstamp.

As noted by trader, analyst and podcast host Scott Melker, the move was accompanied by a strong volume, highlighting the unreliability of price action over the weekend when it comes to building a position.

As several other sources reported last week, Melker reiterated that $ 39,600 must be returned for more optimistic forecasts to prevail.

Similarly, not inspired by the weekly light, was the trader and analyst at Rekt Capital, who said in a recent Twitter update that BTC “is still struggling with the $ 38,500 resistance.”

He added, “This is an area where BTC needs to close the weekly candle higher to give a potential for a rally over $ 39,000.”

So with a disappointing performance, Bitcoin is back in the same old area, which some have warned could lead to a retest of lower levels.

“Personally, I look forward to exacerbating any controversy if we trade in the 29k-40k range,” stressed Pentoshi, a popular trader.

Meanwhile, a move to peaks triggered around $ 38,600 previously negative financing rates on derivatives, as sentiment quickly shifted from expecting further falls to expecting a continuation of the trend.

However, the reversal has resulted in financing rates largely returning to negative territory, and most of them have hovered below the neutral level at the time of writing.

Bitcoin finance price chart. Source: Coinglass
Can the S&P 500 turn its worst month since March 2020?
While Bitcoin’s month-long shutdown should come as no surprise yet, stock markets may offer some last-minute relief.

Ahead of Monday’s session, futures are rising, so the S&P 500, which bitcoin has shown an increasingly positive correlation with in recent months, is moving to its worst monthly reading since March 2020.

S&P is down 7% this month, reflecting a nervous start to the year for bitcoin as Federal Reserve policy begins to arouse enthusiasm that came with the unique supply of liquidity at the start of the coronavirus pandemic.

S&P 500 hour candlestick chart. Source: TradingView
While the Fed remains silent about the interest rate hike plan that should follow the closure of the simple money tap, another problem threatens bitcoin customers closer to home.

The Biden administration’s forthcoming executive order on encryption, which has apparently been pushed back to February, could once again put a cat among the pigeons in the form of an already shaky feeling.

The ghost of an infrastructure bill still remains for many market participants, and the unfavorable handling of the crypto phenomenon will be seriously undesirable for the country that now hosts the majority of Bitcoin’s hashrate.

According to a Bloomberg report last week, demand should focus on the “risks and opportunities” that the cryptocurrency presents.

The plans already included “frequent meetings” with officials to, apparently, standardize the approaches to the state organization in cryptography.

Source: CoinTelegraph