This week the price of bitcoin (BTC) largely controlled by the Federal Reserve. Bitcoin reacted to news of the Fed’s policy primarily as a risk asset and showed a very high correlation with stock markets like Nasdaq and the S&P500.
#Bitcoin‘s correlation with the Nasdaq and S&P500 is at 17 month highs.
The cryptocurrency has behaved strongly like a risk asset in response to the Fed’s latest meeting. pic.twitter.com/j4bkld9xCo
— Kaiko (@KaikoData) January 14, 2022
Bitcoin price is consolidating
Bitcoin was rejected at $44,000 on Thursday and then plummeted again. The BTC rate also failed to hold at $43,000 on Friday and also fell through 42,500 moments later, but made a sizable hit at $42,000. bounce.
Bitcoin then shot up briefly but around USD 43,500 the resistance was too great. Still, bitcoin was able to hold out at around $43,000 initially. Yesterday afternoon, however, bitcoin made another significant dip, falling below USD 42,600, before bouncing right back to USD 43,5000.
Bitcoin then attempted to move up but was already rejected at $43,800 and then dropped back to $43,000 which is enough support for now. This morning bitcoin started to rise again but was unable to break through 43,300 and currently stands at 43,200 at Binance at €37,800 Battle. Bitcoin is starting to move in an increasingly narrow range again.
Market remains cautious
The market sentiment started a lot more bullish as bitcoin recovered from a dip below USD 40,000 last week and moved into a more upward movement. This week, however, the expected increase in volatility failed to materialize and bitcoin traded mostly sideways. The market is still very cautious and the fear still very high:
Bitcoin Fear and Greed Index is 21. Extreme Fear
Current price: $43,076 pic.twitter.com/JrfU8kdRgj— Bitcoin Fear and Greed Index (@BitcoinFear) January 16, 2022
It therefore appears that a so-called short squeeze takes longer. Bitcoin may remain in this consolidation phase for longer, and confidence in a quick, large bounce is slowly waning. Bearish sentiment is picking up slightly due to a small net inflow of BTC into the exchanges. It is very possible that bitcoin will be stuck in this range for a while longer before we see a breakout.
#BTC
Due to extreme fear uncertainty continues among investors this week.
1⃣ High leverage continues, but in range.
2⃣ The funding rates is neutral with a slight predominance of short positions.
3⃣ The OI has decreased, but continues in range.
4⃣ The price in range.
👇 pic.twitter.com/SDZ5UQ6m20— M_Ernest_💯₿ (@M_Ernest_) January 15, 2022
The founders of analytics firm Glassnode report that many investors are still very cautious and sitting on the sidelines.
Low ST Holder Supply in Profit combined with a low Stablecoin Supply Ratio, indicates lots of sideline money waiting to be reinvested into #bitcoin.
Deep dive in @glassnode‘s latest Uncharted 👇https://t.co/xoDy4nZWUa pic.twitter.com/Y00ZzwZqH4
— Yann & Jan (@Negentropic_) January 15, 2022
One of the biggest reasons why bitcoin rose less rapidly than expected in recent months is the lack of new money. We still don’t see a ‘retail FOMO’ in the market as we did in late 2017 and early 2021. Despite this, bitcoin was able to launch a new one in November. all-time high (ATH) because most investors don’t want to sell their BTC and that’s another very bullish sign.
The Oct/Nov all-time high is the first time in #Bitcoin‘s history that new ATHs were reached *without* new highs in New Entities on-chain.
We made all-time highs in bear market conditions, with zero retail, because *no one wanted to spend their BTC*.
Let that sink in, skeptics. https://t.co/YDl3Quw89V pic.twitter.com/shQISwaCMy
— TXMC (@TXMCtrades) January 14, 2022
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