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There have been some major developments regarding inflation, regulatory majors, and the macroeconomic environment going on at the moment. Investors are wary about how these factors may influence Bitcoin’s price trends in the coming months. Owing to these factors, the market is mildly volatile this week and seems to be on shaky grounds. This puts Bitcoin into the limelight as it is a major part of the cryptocurrency market.
Bitcoin’s market statistics and upcoming regulatory developments may offer us some answers regarding its next move. So, let us dive into them.
How Did Bitcoin Fare In the Last Week?
The highest level BTC has reached last week was $25,027. It was enjoying a bullish run and there were speculations of it breaching the resistance level and shooting off towards the $25,500 mark. However, BTC’s time at the top was short-lived and it grounded towards the $24,500 level.
When PEC Price Index rose to 5.4% it caused BTC’s price to drop. This is when BTC witnessed its 7-day lowest level at around $22,900, which was two days ago. Today, its price is around the $23,300 mark. This means a drop in BTC’s price by at least 6.3% over the week.
BTC’s last week’s downshift could be because of comments made by the chair of the U.S. Securities and Exchange Commission- Gary Gensler. He mentioned that like other digital assets, Bitcoin is not a security and that they are not legally enforceable. His remark caused a stir and left the crypto community in confusion. His comments caused some fluctuations in the market, which also affected Bitcoin.
Bitcoin Price Virtually Unchanged At $23,300
Soon after its weekend price drop, BTC picked up a little bit. It has been transfixed at the $23,300 level now for over 72 hours. At the time of writing this article, BTC was trading around the $23,306 level. Amidst the increasing market volatility, Bitcoin’s rooted position indicates that the coin is still resilient and under conducive conditions could undergo an upturn.
Bitcoin’s current market capitalization stands at around $449 billion. Its total circulation is around 19.3 million BTC, and currently at 92% of the max supply limit. With a 24-hour trading volume of $22.2 billion, Bitcoin is down by only 0.25% in the last 24 hours. Which is significantly lower than last week’s figures.
Will PMI News This Week Kick-Start The Bitcoin Upturn?
The US Purchasing Manager’s Index (PMI) is set to release this week. PMI offers insight into the current growth trends of the economy. It is a crucial tool for analysts to understand the performance of the economy. These data releases are extremely important for the crypto world too, as anything that happens in the economy will have a direct impact on the cryptocurrency.
The US PMI for the manufacturing sector will come out on March 1st 2023. The PMI index for January was around 47.5 while it was over-estimated at around 48.2. Since it was lower than the expected PMI score, the dollar dropped which caused Bitcoin to rally soon after.
Experts believe that the reading for February will be slightly higher than its January index, and is forecasted to be around the 48 mark. If it indeed comes out higher than 48, it will further strengthen the hawkish stance of the US Feds. This will mean the dollar is performing well which will put some weight on the cryptocurrency market and may cause a serious stir.
The PMI for the service sector will come out on 3rd March 2023. Last month, the service sector PMI outperformed at 55. This caused the US dollar to surge in value and as a result, the crypto world saw some serious crashing.
If the service index PMI score this week falls, it will result in a drop in the US dollar value and consequently, the cryptocurrency would witness an upturn. The predicted score of service PMI is lower than its January index. If however, the score this week exceeds its predictions and performs well then it will cause Bitcoin to crash.
Consumer Confidence Data and its Affect on Bitcoin
Another important statistical data, aside from the PMI, is the Consumer Confidence Data. According to the latest data that came out on 27th February 2023, this month’s figure increased from 100 to 104.
This indicates a rising purchasing power and consumer confidence. This shows a high possibility that the Feds will implement a tighter monetary policy to curb inflation. Unfortunately, this could have a bad impact on the price action of Bitcoin.
Divided Opinion on Bitcoin
The current market is divided by Bitcoin’s price action. It was previously predicted that if Bitcoin remains over the $23,000 mark and the latest pullback was just a stop on its upward trend. Despite the developing macroeconomic news, Bitcoin has shown resilience. It is of course shaken from its lowest performance on the weekend, however, it is still firm on its ground.
Bitcoin’s current 14-day RSI is near 53. This means the sentiment regarding bitcoin is neutral at the moment. Whereas, its 50-day SMA is $21,714 and the 200-day SMA is around $20,000. Bitcoin’s current price is well over both its 50-day and 200-day SMA, which means a possible upward trend is expected in the future.
Those who are in support of Bitcoin believe that if this trend continues then the coin will form new resistance at $23,300 and it will start to gain strong support at the $23,200 level. It would be interesting to watch if BTC breaks out from the $23,300 level, because if it does then its price may shoot higher for the coming months.
Investors with bullish views predict that bitcoin may reach a maximum high of $27,121. The reason for this view is Bitcoin’s scheduled next halving for the year 2024. Based on Bitcoin’s past years’ price actions, its value is expected to reach unprecedented heights after the halving takes place. Thus, the current low price could be the perfect opportunity for buyers who wants to aim for long-term capital gains.
On the other hand, the pessimists believe that Bitcoin has outrun its bullish move for this quarter. The less encouraging reports from the FOMC about the improving US economic conditions make things more blurry.
If the Feds implement a tighter monetary policy, its effect will cascade down to the cryptocurrency market. In addition to that, the PMI index which is set to be released is looking optimistic for the economy which could further deteriorate the situation for the cryptocurrency market.
The release of the consumer report also highlighted the growing strength of the US dollar. In light of this, Bitcoin price may fall further.
Our Conclusion
The cryptocurrency market is like a double-edged sword. On one hand, it could earn investors astronomical returns or profits. While on the other hand, it has its downside. The cryptocurrency market is fluctuating, thus it allows investors to make quickly in less time. However, this also means that one can lose money quickly if things do not go well.
The market is mercurial and can change suddenly without giving any prior notice. There are a lot of economic factors which easily influence the market. Thus, it is always advised to look at the price trend with some hard pills. Investors should only put funds that they can afford to lose.
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