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Frustration in the market! – These 3 factors put a massive strain on the Bitcoin price

 


After a strong upswing a few days ago, the Bitcoin price fell below the $40,000 mark again. Bitcoin has thus been in the $35,000 to $45,000 range for weeks. Hopes of a bull market in the near future are dwindling. A lot of data, especially fundamental data , seems to speak for a bull run. But a number of factors are currently slowing down an increase. We present the 3 most important factors that are currently weighing on the Bitcoin course.


How has the Bitcoin course been in the last few weeks?

The Bitcoin price is currently slightly over $38,800 (as of March 13, 2022) and thus at one of the lowest values ​​​​of the last 12 months. The correction of the last 3-4 months has stopped, but we haven't seen a real trend reversal yet. Bitcoin continues to linger in the $35,000 to $45,000 range.


In the last 3-4 months we have seen a sharp correction from the all time high of over $68,000 down to $35,000 which was reached in early February. Since then we have seen the correction stop. By that time, the Bitcoin price had lost almost 50% from its all-time high.

In the last 4 weeks we have seen a number of sharp rises above $40,000 giving hope for a possible bull market. However, $45,000 remained a stubborn upper resistance that Bitcoin price was unable to break. Then there were repeated setbacks that bring the price below $40,000. However, $35,000 appears to be a very stable lower resistance. The Bitcoin price levels off between 35,000 and 45,000 dollars.


The hope of a bull market in recent weeks could be derived primarily from the good on-chain data from the Bitcoin network.


The Bitcoin hash rate reached a new all-time high and is currently rising again.

Activity on the blockchain has recently stabilized after dips in December and January, indicating a possible upside to come.

Large bitcoin addresses (bitcoin whales) and long investors accumulate the bitcoin. Normally, the great mass follows these developments with a slight time lag.

However, at the moment it is mainly external factors that are slowing down the Bitcoin bull market. These factors have gained more influence on the Bitcoin course in recent months.


What factors weigh on the Bitcoin course?

In the last few weeks, it is primarily the following external factors that have had a negative impact on the Bitcoin price.


1. The Ukraine Crisis

The war in Ukraine is the world political event that is arguably the most damaging to markets right now . The fact that the Bitcoin price is increasingly dependent on tech stocks also has a negative impact on the Bitcoin price.


At times, the Bitcoin course could also benefit. It rose sharply from $37,000 to $42,000 as sanctions on SWIFT transactions against Russia were raised. However, when these were hardly implemented, the price fell below $40,000 again. 


2. The monetary policy of the Fed 

Due to rising inflation, especially in the USA, the Federal Reserve, the US central bank, is planning to gradually raise key interest rates. The low interest rate policy of recent years has greatly favored risky investments, which has benefited bitcoin a lot.


Interest rate hikes are now threatening in March , which has reduced the willingness to take risks, especially among institutional investors. The fear of these increases has weighed on the Bitcoin price for months. Ultimately, the actual increases could probably hurt Bitcoin less than the rumors about the possible timing in advance.


3. Fear of regulations in the US

The United States and its financial policies remain one of the biggest influencing factors affecting the Bitcoin price. The first Bitcoin financial products for the classic financial market (Bitcoin ETFs, etc.) were launched in the USA (and Canada). This makes US fiscal policy an extremely important factor.


The current government of the Democrats around US President Joe Biden is seen as obsessed with regulation. New strict regulations for Bitcoin and other cryptocurrencies are very likely . This fear is not good for the Bitcoin course.

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