The cryptocurrency ecosystem has witnessed a shift in investor sentiment over the past week, despite the negative events around the world. Bitcoin (BTC), which is currently at $43,500, has seen double-digit gains. Many altcoins have also experienced double-digit gains.
Crypto Fear and Greed index. Source: Alternative
The current conflict in Ukraine and recent government actions to restrict access to banking services might have helped to highlight the value of cryptocurrency. This provides some protection against uncontrollable and perceived government overreach.
Cointelegraph Markets Pro and TradingView data show that BTC’s price fluctuated between $43,350 and $55,400 on March 2, as the world waits for a resolution to current conflicts.
BTC/USDT 1-day chart. Source: TradingView
Here are the views of several analysts on the price action of Bitcoin and where it might be heading in the coming weeks.
Bitcoin accumulation has begun
Bitcoin’s sideways price action has been heavily influenced by the fact that it “has entered volume gap”, according to Rekt Capital (crypto analyst, pseudonymous Twitter user), who posted the following chart which highlights the lower demand for the cryptocurrency at the moment.
BTC/USD 1-week chart. Source: Twitter
Rekt Capital said,
“Volume Gaps are filled completely.” The $48,000 area, which is the mid-range region of the macro range, holds the key to major volume gap resistance.
Ki Young Ju, CEO at CryptoQuant’s on-chain analysis company CryptoQuant, provided evidence that the price will likely rise. Ki stated that the “BTC accumulation phase has started.”
Bitcoin UTXO age bands Source: Twitter
Ki says that “newbies who joined last years are becoming long-term holders” because the market cap for Bitcoins older than six months now accounts to 52% of total BTC market capital, compared to 13% at the recent top.
“Unlikely to reach the previous low of $28,000” as newbies will be waiting for them in the next cycle.
Rate increases could be the next big catalyst
David Lifchitz (managing partner at ExoAlpha and chief investment officer), provided a more detailed analysis of the impact of current events on cryptocurrency markets. He noted that the market experienced a sharp bounce from $37,000 to $44,000 in the “few hours” following the announcement by Russian President Vladimir Putin of a ban on foreign currency transfers.
According to Lifchitz, the rapid rise upwards “stalled around $44,000, which coincided the 100-day moving mean,” which is also “also near the top $33,000-$45,000 range where Bitcoin has been trading for weeks.”
Lifchitz believes the $45,000 resistance is holding steady for now, and pointed out the $51,000 “next hurdle” that still exists before BTC can attempt to reach its record high of $64,000.
Lifchitz speculated that BTC might fall in the near-term, pointing out that it “could go down towards the middle of the $33,000-$45,000 range”. He also noted that “it’s hard to see BTC surpassing $45,000 and then $51,000 without some significant catalyst.”
“The FOMC meeting will be held on March 16th, where the FED decides whether to raise rates. A rate increase “strengthens the USD” and “weakens BTC in USD/BTC pair. It will be interesting to observe how BTC reacts if the FED raises rates in 2 week, although the impact on BTC might not be that drastic.
Related: Bitcoin bulls plan to consolidate control over BTC prices by flipping $44K support
Vertical accumulation is possible
Altcoin Sherpa, a pseudonymous Twitter user, provided a final insight into BTC’s historical performance. He posted the following chart that shows how the current range has been a significant resistance and support zone since last May.
BTC/USD 1-day chart. Source: Twitter
Altcoin Sherpa said,
“Watching $40,000 to determine if there is a pullback. If it’s September, then there will be vertical accumulation. Bitcoin won’t dip much (unless on very short time frames). This is what I think I will not get in the near term.
The total cryptocurrency market is now worth $1.924 trillion. Bitcoin’s dominance rate at 43.2%.
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