Bitcoin continues a solid rebound from a five-week low it hit on Monday when the leading cryptocurrency slid below $40,000. It scared many investors but luckily, they all kept their cool. At the moment of writing, the biggest cryptocurrency by market volume is changing hands at over $41,300. It’s still some way off from the $48,000 it hit a few weeks ago, but according to experts, the macro crypto landscape is looking pretty good.
The great thing about it is that it’s up by nearly 3% over the last 24 hours, and there’s hope the climb will continue. It’s good that prices are recovering from the most recent selloff, yet traders appear to be waiting on the sidelines to see what happens amid rising bond yields and slowing volume. Last week’s supposed breakout turned out lackluster, but this week’s rebound might put Bitcoin in a much better position.
Macro Trends Put a Lot of Pressure on Crypto
The past few weeks have been particularly hard on cryptocurrencies due to pressure from macro trends in wider markets. The world is facing an economic crisis fueled by two years of coronavirus restrictions and the recent war between Russia and Ukraine. Investors are bracing for a shift in monetary policy by the Fed, and markets directly related to the central bank are expected to raise interests many times over. Plus, historically the inflation has never been higher, which complicates matters even further.
Even though cryptocurrencies are supposed to be trading independently, recent developments have seen them go shoulder to shoulder with traditional markets. Tech stocks, for example, seem to have a big influence on crypto. The rise in bond yields also has an impact. The rising inflation and slowing economic growth is a deadly combo known as stagflation that has a much wider impact on finance. Cryptocurrencies seem affected too, and that’s why investors are staying put and waiting to see what happens.
Still, the fact that Bitcoin and Ethereum are holding ground over $40,000 and $3,000 each is positive news. They’re in great position for a breakout, with many investors waiting for Bitcoin to break the $50,000 deadlock. Many are still bullish on Bitcoin and expect it to own this year. The Ukraine war certainly slowed things down, but Bitcoin is expected to end 2022 on a high. We all know how volatile the price can be, so everything can change in a day.
Whales Making Waves?
Crypto analyst Marcus Sotiriou says that there’s a bit of concern regarding the behavior of some crypto whales. He says that at least four major wallets that hold over 10,000 coins have drastically decreased in the past few weeks, suggesting that a lot of coins may have been moved to a broker. This dilutes the short term supply and puts extra pressure on Bitcoin it certainly doesn’t need.
Still, he’s optimistic about the crypto market in general. The Fear and Greed index is still showing Extreme Fear, but the oversold conditions have dropped to 28 out of 100, down from last week’s 34. For now, it’s good that Bitcoin can still rebound, and barring further sub-$40,000 slides, it should be fine.