Analytics shows that Bitcoin is prepping for a Strong Market MovementOctober 11, 2022
The price of the biggest digital currency in the world began a new week under 20,000 USD, which is the price of the bitcoin token. However, a lot of data from the network and the wider crypto space is pointing towards the possibility of a strong movement in the coming weeks, possibly even days. That steps from the balance of the BTC to USD differential but also a range of other factors. For many, the same move has been in the making for a long time now, but the market did not have the necessary catalysts to make it turn into a reality. That is why both the support lines and resistance zones did not see any major challenges for long weeks now. But, the present week could change all of that as the economic data coincides with some big geopolitical instability.
That is especially relevant to Europe, where a war between Ukraine and Russia is raining and apparently quickly escalating. With all of that in the mix, many analysts are pointing out that the status quo is presently the hardest territory for the bitcoin price to hold and with it the rest of the crypto market as well. However, history has shown that expected movements are often completely undramatic while the biggest changes in market price trajectory come overnight. That is especially true in turbulent times and the end of 2022 seems to be the most turbulent year in many previous decades, if not since the end of 1945.
The prospect of a bear market is not exactly something that has not crossed the minds of many investors and traders in the crypto market. The entire better part of the year has been marked with strong bearish leanings, with a massive drop in the cryptocurrency market cap that took place during the summer. Now, the bear market intentions are yet again visible, as historically macro price bottoms are in and clearly formed.
That showcases a development path that favors the path downwards as one studded with less resistance. Like always, there are some bullish silver lining elements in all of that, including in-network development. That is especially relevant to the ethereum network and its recent migration to the proof-of-stake concept which is functioning at the present moment without any problems. But, even these nuggets of optimism are otherwise soaked with the years of macro and micro pessimism of all imaginable types.
Paul Tudor Jones’ Take
There is another big and worrying element in the crypto market alignment with the macro influences – a very negative outlook coming from crypto whales and billionaires with exposure to these assets. One of them is Paul Tudor Jones, a US hedge fund manager, and a billionaire. He said that he still holds some funds in BTC but that these are minor. That for many is a clear statement of grim expectations when it comes to the crypto market as a whole and where its trajectory is going to lead in the coming period. Yet, some two years ago, the billionaire was more than focused on expanding his crypto portfolio.
In mid-2020, he said that he allocated some 1 to 2 percent of his entire multi-billion-USD portfolio into bitcoin. He even said that his further allocation could go up to as much as 5 percent if the US Federal Reserve keeps its then-course. The remarks, made at that particular moment, fueled the already booming bull market to even bigger values. At the same time, investors from all walks of life, from regular individuals to esports players and many others began pumping funds into the digital currency.
Memories of the Bull Market
The statements that Paul Tudor Jones made back then are not that surprising if the ecosystem of cryptocurrencies at that period is taken into consideration. The middle of 2020 killed off any notion that the COVID-19 pandemic will be anything short and transient. Because of that, FED was in the midst of pushing out a range of stimulus schemes for the entire US population, along with many business aid plans.
Their purpose was to keep the financial and economic systems afloat while the COVID-19 lockdowns went underway to try to keep the pandemic at bay. As a result, people began using their excess cash to buy digital currencies, including purchasing BTC tokens valued at 1,2000 USD and other precise stimulus check values. But, those times are long gone not just in the US but everywhere else apart from mainland China, which still sticks to its zero-tolerance COVID-19 policy. In the US, however, any prospect of a bull market is next to impossible not just now, but also in the foreseeable future.
Inflation and War
Unlike back in 2020, when the FED was pumping out money to the US public, the same central bank is now rapidly tightening its monetary policy. The idea is to try to fight the surging inflation that the stimulus period created in the first place. But, the problem is not just that inflation is raging in the US and across much of the world, but that the measures designed to tackle it are very dubious and uncertain.
Paul Tudor Jones compared it to toothpaste, saying that while it is relatively easy to get toothpaste from the tube, it is much harder to get it back inside. Now, chances of a full-blown recession are also very prominent on the horizon, which is once more going to take the cryptocurrency market along for the downward ride as well. If the generally terrible US economic predicament was not enough, there is also a raging war in Ukraine and a prospect of further escalation, which is watched with a level of fear in the EU countries. These nations are locked in an energy and economic crisis, making things there worse than in the US. These signs together point to one possible conclusion – the crypto markets are going to nosedive. The only question is when will this take place.