The experts explained what factors can negatively affect the value of digital assets, and in which case we can expect a recovery in quotations.
On May 1, Bitcoin is trading at $38,000; over the past week, the cryptocurrency has fallen in price by 4%. The market capitalization of the asset decreased to $724 billion with daily trading volumes of $23 billion.
‘Investors are taking a wait-and-see attitude’
Financial Analyst BitRiver Vladislav Antonov
For the fifth week in a row, Bitcoin has traded in the red against the US dollar. During the week, the correlation value between bitcoin and futures on the S&P500 index was 0.86. This indicates that crypto investors continue to monitor the situation in the US stock market.
The American indices decreased following the results of the week and the month. The three major stock indexes lost between 2.7% and 4.2%. Corporate reports for the 1st quarter of 2022 did not inspire optimism. Investors reacted negatively to the results of Amazon Inc., which reported its first loss in seven years. Tesla shares fell 12% after Elon Musk bought Twitter.
On April 25 and 28, the indices tried to resume their upward movement. Along with them, the biotin rate rose to $40.7 thousand. On Friday, the price returned back to the level of $38.1 thousand. Investors refuse to buy shares that have fallen in price amid persisting geopolitical problems and in anticipation of a tightening of the US Federal Reserve’s monetary policy. They take a wait-and-see attitude before important events.
On May 4, the US regulator will announce its interest rate decision. It is expected to rise by 50 basis points to 1%. The market has priced in the May increase in rates, so the reaction of market participants to George Powell’s speech is important. It depends on it whether bitcoin will collapse or return to the level of $40 thousand. If the daily candle closes above $41 thousand, this will be a signal for a further recovery of the BTC/USDT pair. If the S&P500 and Nasdaq collapse after Powell’s speech, then the buyers will have to retreat to the level of $34.8 thousand. The technical picture indicates an advantage in the direction of the sellers.
“We expect a relative thaw”
Senior Analyst at Bestchange.ru Nikita Zuborev
The cost of bitcoin is within the local downtrend. On the contrary, we expect a relative thaw from next week with a smooth return to the level of $39.5-40 thousand. Most likely there will be a simple technical correction within the local movement.
One of the positive factors confirming our moderately positive assessment is the gradually increasing concentration of short positions in perpetual futures on the largest crypto exchanges. This can indirectly be the reason for the start of an uptrend – unscrupulous investors often take advantage of such distortions, using the liquidation of large positions to enhance their manipulations.
However, we do not expect a more serious growth yet, although we continue to monitor the development of the situation. With a positive scenario and overcoming the level of $40 thousand by the end of next week, we can expect the impulse to continue by another 3-5% to the range of $41-42 thousand. there will be no major events during this time.
- Quiz: test your knowledge about cryptocurrencies
— Investment idea: short STEPN, purchase of Ethereum and Solana
— A bill on mining was submitted to the State Duma
— Binance blocked the accounts of relatives of Russian officials
Panama allowed to pay taxes with cryptocurrencies