Flagship cryptocurrency asset, Bitcoin, has gained over $5,700, representing 15.58% in just 3 days from $37,093 on Friday to currently stand at $42,873 as of the time of this reporting.
This jump in price comes despite a strong United States’ job report that should give strength to the United States dollar on Friday but market analysts were left in disbelief as the dollar index lost 1.14% on the day.
Although the month of February has started positive for bulls, many still remember January’s lows, as some analysts have not dismissed the possibility of returning to $30,000. This becomes relevant as the U.S Dollar Index has started the London session bullish.
What you should know
- Pentoshi, a technical analyst expert and the Head of Partnerships at Merit Circle, explained that the $39,000 trading zone is very important for Bitcoin bulls to maintain. He stated, “Here’s how I see things. As long as $BTC holds 39k (as prev stated) then yearly open up next. Imo 80% of #alts will lag, 20% will lead/follow,” adding technical analysis charts to further his point. The yearly open for 2022 stands at $46,311.74, according to CoinMarketCap.
- Another user, Credible Crypto, believes that the latest action could provide proof that Bitcoin is beginning its fifth wave in a series of impulse moves stretching back several years. He stated, “My thoughts on $BTC dominance at this time. Long story short- $BTC outperforms during initial stages of our final 5th wave impulse, alts steal the show after that as $BTC tops, dominance makes a new all time low before this is all over.”
- A reason for the bullish stance could be India legalizing cryptocurrencies. The Indian government unveiled a tax of 30% on the sale of crypto assets in a move that brings more clarity to the regulatory and tax treatment of cryptocurrencies following months of uncertainty about their legal status in the country.
- Although Bitcoin bulls are excited by this new bullish momentum, they should however be wary of the macro-economic factors that do not give Bitcoin a bullish outlook.
- The current hawkish stance of the United States’ federal reserve is one of these factors to consider as many analysts expect rate hikes to begin in March. Although some believe the rate hikes have been priced in due to Bitcoin’s rough start to the year, many others believe a decline towards mid $20,000’s is expected this year.
- There is also news that the White House will issue an executive order in relation to cryptocurrencies in the coming days. Asides this, it looks like the IRS is coming down with regulations surrounding cryptos and NFTs as the regulatory body stated that cryptocurrencies and NFTs are “ripe for fraud, including money laundering, market manipulation and tax evasion.”
Despite being bullish, the macro-economic outlook does not look too good as more investors are now focused on the commodity market, particularly the oil market as tensions between Russia and Ukraine as well as tensions between the United Arab Emirates and the Yemen’s Houthi movement, have brought concerns about the already strained supply of oil as OPEC+ producers are already not meeting up with their approved quota.