What is worth watching this week at BTC

BTC was tested below $ 32,000 on Monday and the bulls are fighting. What could follow? Given that there are few bull short-term votes, it seems that the cryptocurrency is simply not interesting for investors now.

Attention to the Fed again

The focus of investors in the whole economy this week is mainly the Federal Reserve System. Following chairman Jerome Powell’s comments last week, the US dollar made strong gains, while the stock then sold off as market participants changed positions.

Volatility came as Powell suggested that the Fed could soon begin to reduce its market intervention. This has become standard practice in its response to coronavirus and subsequent economic outages.

The reduction in purchases, which according to CNBC currently amounts to approximately $ 120 billion per month, therefore represents a significant transition to a higher level. Powell will speak again on Tuesday, this time before the Senate, and is expected to provide more information on the news he outlined last week.

The Chinese bank erased its statement against the crypto within minutes

At the beginning of the week, this does not look good for the development of the BTC spot price. In addition to the Fed, the cryptocurrency markets are again influenced by another economy, this time more directly: China. China’s agricultural bank, the country’s third largest creditor, has explicitly stated in a statement that its services must not be used for cryptocurrency transactions.

The result of the release was immediately recognizable – BTC fell by more than $ 1,000 in a few minutes before bouncing to $ 33,000. Such behavior is far from surprising, but patience over hasty reactions to China is now underway. The last episode proved to be an example – the bank deleted the statement shortly after its publication, but the damage was done.

“Rick Astleys” are back

As support for $ 30,000 gets closer, responses to Monday’s BTC / USD performance are characterized by concern and confusion. There are indicators of bull turnover, but the price is doing the exact opposite.

One of them is funding rates that firmly favor bulls. At the moment, rates across stock exchanges are negative, which is a classic sign that upward movement is imminent. Movements among experienced hodlery confirm this trend, while coins are ferranged even at levels before Monday’s decline.

Echoes of uncertainty

China has a significant impact on the foundations of the BTC network. Due to the extensive shutdown of the miners, the hash rate dropped significantly from its maximum a few months ago. This is worrying in the short term, especially for those who stick to the classic mantra “price follows hash rate”, but it is necessarily a short-term phenomenon.

Thanks to the natural setting of BTC, there is always an attractive opportunity to mine somewhere in different circumstances. The mining routine motivates to participate in the network due to the decrease in the hash rate and consequently the difficulty. The costs of participation are thus reduced and mining is becoming a viable offer for more and more potential entities.

Is it really that bad?

Not everyone thinks BTC’s prospects are bad. Some comparisons with previous years of the bull market place 2021 firmly within the framework of standard price performance. As the popular Root analyst on Twitter pointed out over the weekend, the indicators on the chain are flashing “oversold” rather than bearish, despite current external pressures.

Others, such as the creator of the Stock-to-Flow model, PlanB, are even bullish on virtually all time frames except the daily chart.

Conclusion

China is making a mess of it. But miners have many offers from elsewhere where they can mine under better conditions.