What’s next for bitcoin after posting its worst week of the year

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Investors have been largely indifferent to the lull and remain so even as signs of a short-term correction are beginning to appear. The largest crypto asset by market capitalization lost 11.25% for the week, its worst since November, according to Coin Metrics. Bitcoin has struggled to break above the $30,000 level since hitting it just over a month ago and has dropped multiple times since. The losses piled up on Friday, with bitcoin trading at levels not seen since March. Ether fell 10.84% ​​for the week. Coin Metrics measures a week in crypto, which trades 24 hours a day, starting at the close of trading at 4:00 p.m. ET every Friday. “Bitcoin price movements seem to correlate with different narratives,” said Michael Zhao, research analyst at Grayscale Investments. “Bitcoin has flipped between the narrative of a risk asset and the narrative of a flight to a safety asset. Bitcoin’s recent volatility could be a response to the market still trying to figure out which narrative is more appropriate.” The crypto suffered this week from a flurry of negative news, including: a wave of long sell-offs, triggered by a false rumor that the US government was selling off its bitcoin, a spike in bitcoin transactions due to the current revival of “Bitcoin NFTs and memecoins, which led to Binance briefly suspending client withdrawals, reports from major market makers slashing US crypto trades, and uncertainty around the US debt ceiling and debt policy. the Federal Reserve. But investors expected tougher times, after its major fiat-crypto on-ramps closed in March during the banking crisis and with the ongoing regulatory crackdown on crypto. Grayscale’s Matt Maximo called it “a continuation of a strong start to the year”. Data from CryptoQuant also suggests that investors took profits this week, as much of the selling volume came from bitcoin holders who bought between November 2022 and January this year. “Despite the drop, bitcoin is still trading in a relatively tight range,” Zhao said. BTC.CM= 5D mountain Bitcoin (BTC) this week In recent days, bitcoin has gone flat. One analyst said that trend alone could weigh on investor sentiment. He also said that the bitcoin chart shows a three-top head-and-shoulders pattern with a higher top in the middle that analysts use to identify a price reversal after an extended uptrend. “Overall, bitcoin appears to be on the verge of a correction, and the next stops in sight are the $26,000 psychological level or its February high at around $25,300,” analyst Yuya Hasegawa said. from the crypto market to the Japanese crypto exchange Bitbank. He also noted that investors should watch yields on the 2-year Treasury note, which has had an inverse relationship with bitcoin this year. Wolfe Research is more optimistic. “Bitcoin finds itself rolling below resistance as the support backtest continues to unfold,” Rob Ginsburg said in a note this week. “Just as we saw in March, we believe this is leading to a re-acceleration.” However, “for bitcoin to continue to climb, it will have to defy a few narratives,” he added. “On the one hand, the average stock is going down. Can bitcoin deviate from stocks, and more specifically, can it deviate from technology, which turns around with semis, which leads technology to the drop?” Bitcoin is still up 59% for the year, but down about 7% for the quarter so far, according to Coin Metrics.

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