Bitcoin (BTC) starts the first week of 2022 below $50,000. The BTC/USD pair did not come as a surprise for a long time. So, what will change the status quo in Bitcoin and altcoins this week?
Record expectation in the series of stocks: How will Bitcoin be affected?
As the first factor, attention is drawn to the stock dollar series. For an example of the current situation when it comes to US stocks, look at the S&P 500. While the risk holdings looked much less appetizing, the index hit an all-time high of 70 in 2021 and successfully completed the year. Bitcoin was among them, with holiday liquidity remaining below $50,000. However, in the first part of the year, the series of stocks are adding to their all-time highs.
Meanwhile, the Federal Reserve has signaled two rate hikes this year Charles Edwards, founder of asset manager Capriole, said in a series of tweets this week, “History is rate hikes. “It shows that the start of the regimes actually resulted in a strengthening in the stock market for 6 months,” he said. Edwards said that while such conditions are generally “good” for Bitcoin, further turmoil will mean the stocks will take a long-term hit thanks to rate hikes.
$40,000 remains support
The fight between bulls and bears has actually been somewhat overwhelming in nature beyond the rhetoric found on social media – volumes are weak, interest from retail investors is low and major players continue to maintain their near sales levels. Popular trader and analyst TechDev acknowledged that $48,000 represents a “little wall.” Van de Poppe said he’s looking at an area between $40,000 and $42,000, which corresponds to “savings” with a transaction above that. For Pentoshi, another analyst, there isn’t much reason to gloat at levels well below $60,000.
What do on-chain measurements show?
Capriole director Ryan McCoy emphasized in the news release that the changing tide in investor selling habits is in line with the later stages of previous corrections. Of particular interest is Glassnode’s Short-Term investor earnings-to-output ratio (SOPR), which shows the extent of gains or losses from those who have moved in the past 155 days. The SOPR, which currently has an average score of less than 1, indicates that the coins spent at the loss have dwindled in number. “Typically, once this metric started at the bottom and then started to rise, a more sustained price trend started,” said McCoy
. “Despite the 38% drop since November, Long-Term Holders continue to hold Bitcoin,” McCoy summarized.
Fundamentals remain positive for Bitcoin
The positive network fundamentals underline the strong belief of the Bitcoin market participants group. Miners are not selling their coins, they are accumulating even though they hit an all-time high of $69,000. At the same time, network hashrate is at all-time highs, as we have reported at Kriptokoin.com . According to estimates from MiningPoolStats, the hashrate is currently over 190 exahash per second (EH/s). Meanwhile, later this week, Bitcoin network difficulty will increase by around 2.4%.
What does the Fear and Greed Index show?
BTC sentiment has a cold start to 2022: Crypto Fear & Greed Index measures “extreme fear”. Investor sentiment has become highly sensitive to smaller price movements in the current range. Fear and Greed reflects this, and price action has risen 8 points since the weekend, although it offers little change.