Bitcoin took quite a ride from its all-time high of over $69,000 to its recent low of $34,000. This has given way to the million-dollar question – What is affecting Bitcoin’s price movements?
Well, various interpretations are afloat. However, it’s important to note that a wide range of factors from macro-economic conditions to on-chain metrics have been influencing the king coin.
Walking down the macro-financial factors
While BTC’s move in November looked like a fairy tale, many failed to notice that macro conditions have been dominating the short-term outlook for crypto-markets. Starting with the Omicron Variant, The Fed’s outlook as inflation grew – A couple of global factors have been affecting the price as a whole.
Interestingly, U.S. January’s underwhelming employment data released on 4 February helped Bitcoin push up to test the $40k-level as it signalled to the Federal Reserve that there is less inflation to take action on. Also, a potential conflict between Russia and Ukraine has been a major concern for crypto-investors across the globe.
These factors have led to Bitcoin’s increasing correlation across markets. In fact, Bitcoin’s correlation with the S&P 500 increased in January. This means that equities might be an area to watch when making price predictions for the number one digital asset. Particularly, Bitcoin and crypto broadly moved closer to risk-on assets such as tech stocks.
In this context, it is to be noted that traditional markets are going through a volatile earning season, and it is causing ripple effects across crypto. Besides the external factors, the price technicals seem to have interesting insights too.
What the technicals say
1 January saw bulls putting up a brave fight at $48,000. However, BTC bears took over to initiate a major sell-off. The price plummeted to find support at $43,357 on 20 January. Interestingly, the
