Five factors to influence Bitcoin’s price this week as rate surges

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factors to influence Bitcoin's price this week
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Bitcoin (BTC) is beginning a new week in all-too-familiar territory, only missing out on all-time highs. Here we outline five factors to influence Bitcoin’s price this week as rate surges.

Following a strong weekend, the largest cryptocurrency has prevented a deeper price drop than last week, and $50,000 has remained a strong support level.

So, what’s next? According to Cointelegraph, these five factors to influence Bitcoin’s price this week.

Number 1 in the list is ‘Stocks’

Stocks set for crunch moment

As worries rise about the effect of Friday’s $20 billion worth of block trades, Monday will be an interesting start for US equities.

The sudden arrival of orders targeting mostly tech stocks, which came from major players Goldman Sachs and Morgan Stanley, has given traders a headache. This will now play out as Wall Street reopens on Monday.

“Traders everywhere know the story and will be glued to their screens,” portfolio manager Sharif Farha told Bloomberg.

Volatility in stocks implies a knock-on effect for Bitcoin, but the ultimate extent of that depends on movements which at the time of writing remain unknown.

“The markets could start trading in a friendly manner at the beginning of the week,” Andreas Lipkow, a strategist at German bank Comdirect added.

“Although there is currently some major profit-taking and unusual block trade activities, these market asymmetries can currently still be processed well.”

Other macro factors include falling oil prices, but this is less of a concern for Bitcoin bulls than it is for stock bulls. Prices are falling as hopes of a supply increase grow, thanks to an Opec+ meeting later this week and the possible resolution of the Suez Canal crisis.

Number 2: Bitcoin’s current price “still consolidating” at $56,000

For Bitcoin spot markets, at least earlier on Monday, it’s a tale of consolidation.

Saturday and Sunday brought some welcome relief for traders who had watched BTC/USD descend to lows, which at one point tapped $50,000 itself.

Deeper dives were avoided, however, and liquidity at $46,000 was left untouched in favor of a return to familiar resistance beginning at around $56,000.

At the time of writing, that was exactly where Bitcoin was, still unable to tackle what has become a broad sea of sellers all the way up to current all-time highs of $61,700.

“Bitcoin scenario is playing out so far, in which the crucial resistance fails to break in one-go. Either way, that’s not bad,” Cointelegraph Markets analyst Michaël van de Poppe summarized on Sunday.

“If $54K fails to hold support, I’m assuming we’ll see this scenario play out. Still consolidation.”

Following the all-time highs, analysts’ mood has been characterized by a wait-and-see approach. They claim that the effects of a supply shock, such as exchange reserve depletion and a lack of selling from strong hodlers, have yet to be felt.

Number 3: April gains “depend on” consumer spending

According to on-chain analytics service Glassnode, April’s price success would “rely” just as much on retail investors as it will on institutional investors.

Glassnode’s new study, released last week, revealed an unusual discrepancy between consumer spending and disposable income created by coronavirus lockdowns in the United States.

Normally closely linked, the two indicators of retail investor buying power diverged with the start of lockdowns — there was more capital, thanks to stimulus checks and other factors, but nowhere to spend it.

With reopenings gaining momentum in a number of states, the equilibrium is expected to be restored as pent-up market demand becomes a major storyline.

Normally closely linked, the two indicators of retail investor buying power diverged with the start of lockdowns — there was more capital, thanks to stimulus checks and other factors, but nowhere to spend it.

With reopenings gaining momentum in a number of states, the equilibrium is expected to be restored as pent-up market demand becomes a major storyline.

“Many households now have an extra buffer of income to spend, due to new stimulus checks and decreased spending during lockdowns,” co-founders Yann Allemann Jan Happel tweeted.

 “Will they invest this into markets or pay off debt? Bitcoin’s April performance will depend on it.”

An accompanying blog post argues that the most recent stimulus checks, worth $1,400, have yet to make their presence felt in the economy.

“The recent stimulus package was much larger than the one in January, yet global markets have felt little effects of it in the global markets so far,” Glassnode said.

“It’s difficult to measure to what extent the checks have arrived in households until today, and more importantly how willingly retail is going to spend or save the money this time considering it may be the last monetary stimulus for a while.”

Meanwhile, unconfirmed reports indicate that the next round of checks may arrive earlier than anticipated.

Number 4: RSI says Bitcoin will deliver more gains

Bitcoin technical indicators remain overwhelmingly bullish on longer timeframes.

The latest one to be highlighted is the relative strength index (RSI), which is now entering its “peak” phase which traditionally accompanies price highs.

Quant analyst PlanB, creator of the stock-to-flow series of Bitcoin price models, showed how RSI fluctuates relative to the point in Bitcoin’s halving cycles — four-yearly periods between reductions in the block subsidies paid to miners.

With the year after a halving normally the best in terms of price gains, RSI is indicating that 2021 will be no different to 2013 or 2017.

“Bitcoin monthly RSI is not even 95. In 2011, 2013 and 2017 bull markets we had at least 3 months above 95. Still early,” he summarized over the weekend.

Stock-to-flow meanwhile demands a $100,000 or $288,000 average BTC/USD price this halving cycle, depending on the exact model used.

Number 5:Fear & Greed stays calm (final factors to influence Bitcoin’s price this week )

The weekend’s price increase had a welcome muted impact on the prospects of an imminent sell-off in terms of market sentiment.

According to the Crypto Fear & Greed Index, a well-known market tracker.

Fear & Greed measures how the market feels about Bitcoin price behavior on a scale of 0 to 100, inferring whether recent activity indicates a rebound off lows or a sell-off from highs.

The Index, which circled all-time highs alongside BTC/USD in February, flashed warning signs as it rose to previous all-time highs of $58,300.

By March 1, the rebound had slashed its ranking from 94/100 to 38/100, only to return to the mid-70s days later.

Read also: These 5 cryptocurrencies could make you super rich this week.

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