A dropping U.S. dollar and increasingly optimistic ads holds bitcoin bulls happy amid a small correction to $47,000.
Bitcoin (BTC) sails high on a wave of optimistic sentiment as it prepares to take on $50,000.
After a wild weekend that saw a new all-time high, expectations are putting bitcoin back in the spotlight as a fundamental dimension comes into play—in what’s store for you?
Cointelegraph considers five variables that could help to drive the market in the coming days.
Stocks gain while the dollar dives
Stocks are climbing, building on a record-breaking run that has seen many indices shoot higher than ever before.
Despite warnings that good times may soon come to an end, including last week’s Warren Buffett market indicator, markets started in the green on Monday.
Japan’s Nikkei scored a 1.6 per cent growth rate of 30,000 points for the first time since 1990.
At the same time, the power of the US dollar continues to decrease. The U.S. dollar currency index, which tests USD against a basket of trading partner currencies, has dropped its latest attempt at a turnaround over the weekend to test support again at 90.
The index has been in a bearish mood for most of the past year, and Bitcoin has, in exchange, benefited from cycles of express weakness and seen losses during trend-setting comebacks.
Yet long-term central bank money printing means that, in many jurisdictions, the economic climate does not return to its former character anytime soon.
Responding to a Valentine’s Day post from the European Central Bank (ECB), Saifedean Ammous, author of the popular book, “The Bitcoin Standard,” had little sympathy. The institution had promised to “keep financing conditions favourable ‘Til the crisis is through.”
“This is why fiat people spend their pathetic lives hyperventilating over one imaginary crises to another,” he responded.
“Lots of brrrrrr to be made whenever there’s crisis!”
$50,000 or not $50,000? That is the question
Specifically, when it comes to bitcoin, this week is (mostly) about the short term for investors.
One case in particular—how and when the biggest cryptocurrency breaks $50,000—is a talking point around the industry.
The weekend created a concerted attempt to break the current psychologically meaningful amount, with a classic “out-of-hour” bout of volatility generating a new all-time high of $49,714.
With the vendors lined up at the final hurdle, however, $50,000 eluded the bulls and BTC/USD retreated lower before continuing to stabilise at around $47,000.
“Huh, huh? #Bitcoin price isn’t going up in a straight line? “The unsurprising Cointelegraph Markets analyst Michaël van de Poppe summed up on Monday.
Van de Poppe had frequently cautioned that Bitcoin’s vertical upside could not survive without many, and often intense, pullbacks.
In his own forecast, meanwhile, fellow analyst filbfilb produced a new chart with a potential end-of-month BTC price as high as $78,000.
“The continually good news narrative we have seen makes me think this is entirely possible,” he added in comments on Twitter.
“50k could easily be a squeeze, that’s what the volume says anyways.”
The target expands filbfilb’s previous expectations of $52,000 forming the next point of consolidation before a run to $63,000.
Noncoiner-naysayers feel the game is lost
Filbfilb’s “Good News Narrative” refers to an ongoing phenomenon reminiscent of the domino effect among major institutions reassessing and flipping bitcoin.
Last week alone, Tesla bought in big time, while America’s oldest bank, BNY Mellon, announced that it would provide cryptocurrency support to institutional clients. Now, anticipation focuses on Morgan Stanley’s making official the rumours about his latest bitcoin point, allegedly involving his investment arm.
At the same time, critics of its popularity tend to be increasingly desperate at their lack of ability to stop it by conventional means.
Nigeria, which last week saw its own lawmakers admit that Bitcoin had eroded the value of its national fiat currency, the naira, is a crucial case in point.
“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what,” Senator Sani Musa said.
“The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.”
The picture could not be more different than the fortunes of those already, to a greater or lesser extent, on a “Bitcoin standard.”
Even Tesla, who purchased it at the beginning of 2021, is now up 40% on its $1.5 billion treasury conversion. Similar reports are likely to come on the heels of fellow entrepreneur MicroStrategy’s dedicated “Bitcoin for Institutions” summit earlier this month.
“Mind blowing” similarities point to $274,000 BTC price
As Cointelegraph frequently states, multiple indicators both basic and complex point to the potential for substantial Bitcoin price upside down over timeframes.
Zooming out, however, new data clearly regulating spot prices highlights what one analyst claims is almost a mirror copy of the previous bull run.
“It’s pretty mindblowing that the Bitcoin chart is damn near IDENTICAL to Aug. 2017,” Jack Purdy, a researcher at data provider Messari, tweeted on Sunday.
“Anyone need a refresher for what happened next?”
Responding, Glassnode CTO and co-founder Rafael Schultze-Kraft have estimated that, based on its current role in the cycle, BTC/USD is in a position to hit $274,000—an rise of 471 per cent in line with 2017.
At the same time, Glassnode highlighted a distinguishing factor since Bitcoin’s most recent block subsidy halving last year. Miners, apart from some conspicuous occasions, are selling less than during previous bull runs despite spot price being far higher.
“Previous #Bitcoin bull markets are characterized by fingerprints of increased miner outflows of $BTC that had been acquired throughout prior years,” the firm noted on Monday.
“Even though we’re seeing slightly higher outflows of older BTC, this same pattern has not emerged in the current bull market.”
Biggest ever weekly candle
Finally, to put last week’s price action in context, Bitcoin has seen its biggest weekly candle in history.
At 25%, or $9,800, Bitcoin added a quarter of its value again over the past seven days. That follows various similar feats, including the largest ever daily candle earlier in February.
Against such good results, even the downsizing of just before $50,000 was of little interest to analysts outside the popular press on Monday.
“Agressive selling by larger derivatives traders have lead to a big CVD div while $btc price has drifted up. (absorption of sellers by buyers),” filbfilb explained in a tweet.
“Funding keeps flipping high at resistance, so it’s probably not time to play out yet, but I remain bullish.”
Filbfilb referred to the growing funding rate for major exchanges, which forced long traders to pay more to hold their positions close to psychologically meaningful price points.
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