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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Fantom Pains: Factors Behind The Crypto Markets Worst Weekly Performance

Reynaldo Marquez
Reynaldo Marquez
3 years ago
2 mins read
Crypto bitcoin btc btcusd

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Bitcoin has failed to display strength during the past week and remains at risk of revisiting previous lows. The benchmark crypto seems to be negatively reacting to the current macro-environment, and an overall weakness from the buying side.

Related Reading | Risk Aversion Pulls Crypto Market Down, Bitcoin Still Below $40K

At the time of writing, the price of Bitcoin trades at $38,544 with a 1.2% loss in 24 hours and a correction of 10.8% in the last week.

Bitcoin BTC BTCUSD Crypto
BTC trends to the downside on the daily chart. Source: BTCUSD Tradingview

As NewsBTC reported yesterday, Bitcoin has been in an “equilibriums” with speculator dumping their coins for a loss as bulls attempt to create a floor. This status quo has existed since Q4, 2021, leading to BTC’s price moving sideways for months.

Although constant, this state in the market is fragile and could break into either direction, but the downside seems likely. In the short term, bulls have failed to prevent BTC from breaking below and support at around $40,000.

Data from Material Indicators (MI) continues to record an important stack of bid orders at around $36,000, and $35,000. In addition, as BTC moved into $40,000 recently, there has been a quick response from sellers which could be trying to keep the price suppressed.

This dynamic in combination with low demand hints at a potential active attempt for entities trying to fill their bags at lower levels. A return into the mid-area around $40,000 could invalidate this theory.

In a recent report, Arcane Research highlights two major macro events which seem poised to bring in volatility into Bitcoin and the crypto market. On Thursday, the U.S. will print a new CPI for February which is expected to continue its uptrend and hit 7.9%.

Bitcoin BTC BTCUSD Crypto
Source: Arcane Research

Due to the Russia-Ukraine conflict, there is a lot of uncertainty on how the U.S. Federal Reserve (FED) will react to higher inflation. At the moment, the markets seem to believe it will be to the downside for risk-on assets, such as Bitcoin.

Inflation, War, And An Unpleasant Week For Crypto Investors

The previous thesis seems to be supported by a rise in commodities. The price of Gold (XAU) has been on a rally after the Russian invasion of Ukraine. The precious metal trades north of $2,000, a price was last seen in 2020 post the implementation of lockdown measures to prevent the spread of COVID-19.

Crypto Gold XAUUSD
Gold returns to post 2020 rally highs on the daily chart. Source: XAUUSD Tradingview

During that period, when Gold began its rally, Bitcoin suffered from a downtrend as global uncertainty unfolded. Other commodities have begun an uptrend, like BTC, ETH, XRP, ADA, and other large-cap cryptocurrencies suffer. Arcane Research noted:

Further, the war in Ukraine has huge implications on the commodity markets leading wheat, oil, gas, and nickel to soar – this may complicate central banks’ effort to combat inflation. More importantly, surging commodity prices may have spill-over effects, and we already see odd signals in Egypt and Poland.

Related Reading | TA: Bitcoin Faces Uphill Task, Why BTC Bears Are Still In Control

If central banks, particularly the U.S. FED, consider inflation to be a more persistent issue than initially thought, it may lead them to take faster and more aggressive monetary measures. A hawkish FED could turn worse for an already soft crypto market.

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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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