Will Bitcoin Go Back Up In The Second Quarter Of This Year
Bitcoin, the leading currency in the cryptocurrency world, has fallen below the psychological support level of $40,000 this week, despite rising 2% (May 4).
The price of the currency fell this week by more than 7%, bringing it to an eight-week low. These moves may be a sign that cryptocurrencies are maturing as assets as they are affected more by the same issues currently affecting stock markets, which include concerns about geopolitical instability, a hawkish Federal Reserve and rising inflation causing a short-term shift in sentiment.
But what will drive the price as we move deeper into 2022, and what are the latest Bitcoin predictions about the long-term direction?
Bitcoin Trends Higher Due to Uncertainty
Bitcoin price expectations are becoming more responsive to expectations of inflation and interest rates, as they start to move in line with stock prices. Big for Tesla and SpaceX.
A look at the history of bitcoin prices during 2022 shows that it started the year at $46,306 after retreating from the November record of $68,789, and it fell in January to $33,184 and then rebounded to $45,661 on February 10, but failed to hold and fell to $34459. On February 24, the financial markets sold off in response to the Russian invasion of Ukraine.
The price rose again to briefly touch the $45,000 level on March 2 before retracing to $37,260 on March 7. Since then, the bitcoin price trend has shifted higher, approaching $43,000 on March 23, as of April 11. At $4,0963, down 11% from the previous seven days.
“Global sanctions, fear of currencies and fear of various government crackdowns may be the reason why bitcoin has persisted despite declines in the altcoin market and tech stocks,” said crypto analysts.
Institutional interest in Bitcoin is sensitive to macro developments
Digital asset funds saw a slight inflow of $132.7 million (as of May 4), and the same trend continued with outflows mostly coming from North American service providers, with outflows making up 98% while outflows in Europe were broadly flat.
The recent negative sentiment in North America is believed to be due to the ongoing tensions over regulation and geopolitical issues stemming from the Ukraine conflict, since the start of the conflict the market has seen volumes rise by 160% and 150% in Ukraine and Russia respectively.
An analysis from Arcane Research shows that open interest in the bitcoin futures market has remained stable at 360,000-380,000 throughout 2022 so far, reflecting prolonged consolidation.
El Salvador’s First Bitcoin Bond Delayed
The growing uncertainty in international markets resulting from the Russian-Ukrainian crisis has also had an impact on El Salvador’s plan to launch the world’s first bitcoin bond. from the issuance of bonds worth one billion dollars.
The release was expected in mid-March, but the government postponed the release as markets faced increased volatility in response to the crisis. El Salvador has allegedly requested up to $1.5 billion in bitcoin bonds, and analysts at Dutch bank Saxo have indicated that if true, the bonds are likely to be oversubscribed.
What do analysts expect about the Bitcoin price trend in the near term
After the US Federal Reserve meeting on March 16, risk assets rebounded, as Federal Reserve Chairman Jerome Powell made clear that there would be no violent and faster interest rate hikes this year, and Powell said the Fed would not act emotionally and would continue to trust. By the facts. Markets have expected seven rate hikes in 2022, but since there are only six meetings left and the Fed likes to take one breather after the hike, seven hikes are unlikely.
Risky assets including Bitcoin responded with a rally, but this was short-lived, as the coin quickly fell to around $36,000. The main target for Bitcoin is to break out of the dangerous range of $35,000 to $44,000, if successful the market will start to recover faster and the coin will test at $52,000.
Apart from the current economic and political problems in the world, there are no new problems so far that could negatively affect Bitcoin, so if things continue to stabilize then we are likely to see the crypto market continue to grow.
Another analysis indicated that Bitcoin appears to be stabilizing when dealing with the $40K level, but as we’ve mentioned several times, it needs to go back above $45,000-$47K if we want to avoid a pullback.
Will Bitcoin reach $1 million in the long run
Bitcoin mining is based on the blockchain that links all public transactions together through the use of the Proof of Work (PoW) consensus algorithm. Bitcoin miners compete against each other to solve mathematical equations and confirm the legitimacy of transactions, and are rewarded with bitcoin tokens thus encouraging more participation in the crypto mining “game.” The maximum supply of bitcoin is 21 million coins, as of May 3, 2022 19 million bitcoins have been traded.
