Market moves: Analysts remain prudent on bitcoin amid triangular anchorage below 200-day average. The reduction in Fed liquidity is not so significant, as evidenced by the calm in the credit markets.
Market movements.
Over the past week, the cryptocurrency has consolidated in a narrowing price range under the 7200-day moving average above $48,000.
However, analysts are confident that significant growth will continue.
“Liquidation signals have changed since February and March and show daily triggering of buy orders,” Laurent Xsis, managing director and European head of cryptocurrency ETF firm Hashdex, told CoinDesk in a Telegram chat. “Sustained online activity suggests limited downside risk. This hints that the next big move is likely to be positive, provided there is a sustained improvement in the network driven by continued demand from institutional investors.”
Investments continue to be attracted despite the lack of growth of bitcoin. Over the past week, digital asset funds raised $180 million in the seven days to April 1, according to a report from CoinShares.
Despite volatile macroeconomic conditions, institutional investors continue to invest in bitcoin, altcoins and ethereum.
• “Flows over the past few days have been smaller, with more activity in altcoins, especially Tier 1 coins and DeFi,” said Stack Funds CEO Matthew Dibb. “We see no reason to panic or a serious reason for a bearish pullback. Despite some macro uncertainty around the Fed and Russia, BTC has performed relatively well and is starting to get more support.”
• Rather aggressive policy of the Federal Reserve System (FRS), however, does not affect the credit markets, which means that the reduction in liquidity is not as significant as expected. Perhaps this is the reason for the prevailing upward trend in stocks and bitcoin.
• “I think it’s just a sign that the liquidity squeeze has not lived up to the Fed’s expectations. In addition, there is strong buying in the Asian region as China and Japan routinely cut rates,” said Griffin Ardern, volatility trader. “However, the liquidity squeeze didn’t happen globally at the same time, and we can still find some liquidity pumps.”
• But if inflation rises, the Fed could tighten policy, causing significant fluctuations, Ardern said.
• The March CPI will be released next week. Ardern also cited the minutes of the Fed’s March meeting and the upcoming ECB meeting as important events to watch out for. “The Fed’s minutes could provide some relevant information about the balance sheet reduction roadmap,” Ardern added.
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