‘Up only’ for BTC fundamentals — 5 things to watch in Bitcoin this week
Record hash rate and difficulty provide a positive overture to some uninspiring price moves, with Bitcoin now offering network security never seen before in its history.
Bitcoin (BTC) starts the week with a slow drag downhill toward pivotal support at $40,000.
After bulls had something to celebrate last week, the current environment looks like a fresh dose of reality as BTC battles nervous stock markets, a resurgent United States dollar and more.
The picture is, as always, mixed — while spot price may not look too impressive, under the hood, Bitcoin is stronger than ever, and network participants are doubling down on their long-term commitments.
Add to that the slow decline of risky behavior on derivatives markets and the stage could be set for some sustainable price growth. Will it happen this week?
Cointelegraph presents five factors to consider in the coming days for BTC/USD.
Bitcoin tests new 50-day moving average support
After 10 days of recovery, Bitcoin is now reckoning with the resistance levels, which have bee absent from bulls’ radar since the middle of January.
Having passed $45,500 late last week, the weekend saw relatively calm conditions as the daily chart nonetheless saw a series of lower lows.
The weekly close, the topic of interest Sunday as price action stayed practically in an identical place to the end of last week, ultimately disappointed — BTC/USD set a lower close of just under $42,000.
With that, however, comes the possibility of short-term upside to fill the CME futures “gap” now above spot price at near $42,400.
“Bitcoin is still just sitting in between support and resistance,” popular commentator Matthew Hyland summarized Monday, adding that he was “relaxing” in the face of current price moves.
With support and resistance levels close by, trader and analyst Rekt Capital, meanwhile, reiterated BTC’s relative weakness when it comes to reclaiming support levels on a macro scale.
Previously, he had identified two moving averages that needed to be reconfirmed as support in order for Bitcoin to have a shot at its all-time high from November.
DXY sours risk asset mood
Bitcoin’s reversal toward $40,000 may not be helped by an advancing U.S. dollar.
Since Feb. 4, the U.S. dollar currency index (DXY) has been on the rebound, canceling a steep downtrend that had characterized the week prior.
That traditionally spells problems for risk assets, and as of Monday, DXY was trading back above the 96 mark.