2024-05-03 19:04:26
At the end of the week, the Bitcoin exchange rate attempted to recover the losses of the past few days. It was more or less a success, and that’s not by chance. The Bitcoin roller coaster is here – all you have to do is ride up and down at that all-important good pace
Over the past seven days, the price of Bitcoin has fluctuated wildly. Looking at the weekly maximum and minimum, the difference was 13%. The exchange rate experienced a real roller coaster ride during the first days of May.
The market was rather calm at the start of the week, trading around $64,000. However, after April 30, things started to deteriorate. At this point, BTC took a massive plunge, falling below $60,000 for the first time, causing many investors to panic.
The next day, May 1, BTC fell below $57,000. This coincided with the first day of IBIT ETF releases. Launched by BlackRock, this spot Bitcoin ETF has only recorded gains in terms of capital inflows to date.
In fact, the market has since recovered. By Friday, the price of BTC had already reached $62,000, and in the last 24 hours alone it had increased by 5%. This is mainly due to the current macroeconomic environment, as much good news has not arrived in the cryptocurrency market this week.
The most important cryptocurrency news of the week in one place
Changpeng Zhao – one Binance former CEO and one of the founders – in the end he received his deserved punishment (?). He will spend 4 months in prison for violating anti-money laundering regulations. This brought to an end a case that had been going on for several months. CZ said she was biding her time and moving on to the next chapter of her life: education.
Bitcoin Jesus, Roger Green arrested in Spain. He would be accused of tax fraud amounting to $50 million. Green is closely associated with Bitcoin Cash and is one of the cryptocurrency’s most vocal supporters, but it appears he has had problems paying his taxes.
US prosecutors are investigating Jack Dorsey and his company for improper cryptocurrency services. Block – the payments company founded by Jack Dorsey (co-founder of Twitter) is reportedly under investigation. The company reportedly failed to meet necessary standards and supported transactions in violation of sanctions.
Coinbase gradually introduced by the Bitcoin Lightning Network support on the platform. According to the announcement, users will gradually be able to choose whether they want to send their Bitcoins to the Bitcoin mainnet or the Lightning network on mobile and desktop computers.
Bitcoin ETFs are slowing down
The BlackRock Spot Bitcoin ETF saw a first day out. The Bitcoin ETF, IBIT, launched by BlackRock, saw capital outflows for the first time since its inception amid a broader market downturn.
Days after suffering devastating losses that pushed BTC to $56,500, bitcoin rallied in the early hours of Thursday and Friday. This coincided with a slowdown in outflows from spot Bitcoin exchange-traded funds (ETFs) in the United States.
Net outflows from spot bitcoin ETFs on May 2 were $34.4 million, according to the latest data compiled by SoSoValue.
BlackRock’s IBIT and Fidelity’s FBTC, the second and third largest BTC funds by total net assets, remained stable. A similar trend was observed for Bitwise’s BITB, VanEck’s HODL, and WisdomTree’s BTCW, which also saw no flows.
However, James Seyffart, a leading ETF analyst at Bloomberg, has previously noted that days with no inflows are completely normal and should not be misinterpreted as not being the fault of the products.
Macro data drives the price of Bitcoin
The decline at the start of the week followed by the rebound at the end of the week closely followed the evolution of the stock market this week. This is mainly explained by US macroeconomic data.
The US interest rate has not changed
Bitcoin prices recovered on May 2 after the US Federal Reserve decided to leave interest rates unchanged. This dampened investors’ hopes of a cut in interest rates in 2024.
According to Federal Open Market Committee (FOMC) minutes released May 1, the Fed said interest rates would remain between 5.25% and 5.50%. Added:
“There must be more confidence in this area so that inflation can move sustainably towards 2% before interest rate cuts can take place.”
The Fed also revealed that it was slowing the pace of shrinking its balance sheet – known as quantitative tightening (QT) – from $60 billion per month to just $25 billion per month.
It appears that the FOMC’s decision has increased risk appetite and therefore asset prices. The price of BTC spiked within minutes of the news and is up more than 3% in the past 24 hours.
Is bad news actually good news?
Then, on May 3, Bitcoin continued to strengthen. Bitcoin rose more than 5% after US jobs data was worse than expected (!). But not only did the Bitcoin exchange rate strengthen, but stocks also immediately fell, Dow Jones futures rose by 500 points. In response to bad data…
U.S. employment data for April fell short of expectations, revealing weakness in the labor market. However, this situation could lead to the long-awaited and long-awaited drop in interest rates in the market. But at what cost ?
So we are currently experiencing a weakened labor market, lower GDP growth and rising inflation. Hooray!
Could the 2016 Bitcoin cycle repeat itself?
Due to the recent price decline, Bitcoin has reached its lowest level in two months.
Recent coverage from popular analyst Rekt Capital on BTC price action in his comment said the cryptocurrency followed a similar trend after the Bitcoin halving in 2016.
Bitcoin repeated history this cycle by recently falling below the accumulation range. In 2016, the largest correction in the accumulation range was 17%, which lasted 3 weeks. On the other hand, we are now only at -6%. It is therefore possible that the exchange rate will fall. However, the analyst does not expect a much deeper decline either.
Bitcoin’s 100-day moving average (MA) is now on the radar for many, currently sitting at $59,930.
This trendline has been strong support since October 2023, and the bottom of the Bitcoin bull market in the first half of 2023 also appeared at this level. Although a full-day candle appeared below the track, the price managed to regain support with Friday’s rebound.
The 100-day moving average is an important step in the market’s uptrend, which can lead to a short-term squeeze. However, if the exchange rate fails to consolidate above the moving average support, it would spell a very big ordeal for BTC buyers in the future.
Bitcoin Whales Buy All Bitcoins
Ki Young Ju, the founder of analytics firm CryptoQuant, revealed the behavior of Bitcoin whales in recent days. Ju highlighted that the sub-$60,000 zone was a popular buying level for larger investors.
Bitcoin whales have accumulated 47,000 BTC in the last 24 hours – the analyst commented on the chart containing the addresses of active whales.
Even before the current fall, Microstrategy was also buying Bitcoin. MicroStrategy further in April expanded it cryptocurrency wallet, Michael Saylor, the founder of the company, announced that he had acquired an additional 122 bitcoins worth $7.8 million.
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