Its price must decouple in order to increase.
Although the price of Bitcoin [BTC] has increased by 32% year-to-date (YTD), two experts from CryptoQuant discovered that the king coin’s capacity to separate from conventional financial markets is mostly responsible for its price rise going forward in the face of current macroeconomic difficulties.
The 200-day moving average of BTC and its realized price were analyzed by fictitious analyst Grizzly, who discovered a pattern that has previously been seen in market bottoms.
The 200-day moving average and the realized price cross or overlap as they go from top to bottom in this pattern, which points to the establishment of a long-term bottom. In 2019, 2015, and 2012, same pattern was seen; following that, BTC saw a long-term rising trend.
According to Grizzly, if BTC separates from assets like stocks and operates as a store of wealth in these extremely inflationary times, the anticipated long-term rising trend may occur.
In the spring of 2019, when the NUPL index breached its 365-day moving average and BTC saw significant bullish momentum, the analyst discovered that the present market condition was comparable to that movement.
However, BTC’s NUPL index challenged its 365-day moving average, which functioned as support, after running into rejection at the medium-term resistance zone of 0.15 to 0.25.
A strong bullish momentum might develop if the 365-day MA is successfully held, and if the resistance region is overcome.
According to Baro Virtual, for the upward break to occur, BTC’s price has to “decouple” from the larger financial markets.
The BTC market will not sever relations with established marketplaces.
The Federal Reserve increased interest rates on February 1 by a quarter of a percentage point, which was the lowest increase since March. In response to this news, the prices of BTC and ETH decreased marginally by 0.2% and 0.3%, respectively.
The fact that BTC’s price reacts strongly to news about things like inflation figures or changes in Federal Reserve interest rates is no longer a surprise.
In fact, every time interest rates were raised in the past year, the price of BTC changed.
In order to guarantee that inflationary pressures are adequately managed, the Fed Chair, Jerome H. Powell, stated during the most recent Federal Reserve meeting that “a few more” interest rate rises were being examined.
As the year goes on, one may anticipate that the price of BTC will respond to any more interest rate increases, if history is any indication.