Highly volatile market amid mixed signals from macro data

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The cryptocurrency market has remained very volatile over the past week. Bitcoin, the largest crypto token by market cap, hit a 13-month high of 31,500 before falling to $29,900 during the week. Over the past week, the token is down 2.61%, according to data from CoinMarketCap.

“Crypto markets traded in a tight range with a slight downward bias as macro data signals headwinds ahead,” said Parth Chaturvedi, chief investment officer at CoinSwitch Ventures. “Last week’s ADP report in the US confirmed the heat of the economy and the need for further rate hikes by the Fed at its upcoming FOMC meetings, driving down the prices of ‘risk assets’, including crypto.”

Over the past few weeks, the market has witnessed a bull run after news of several major entities showing interest in Bitcoin. In an interview last week, the managing director (CEO) of asset manager Blackrock, Larry Fink, called Bitcoin digital gold and a “game-changing” upgrade for financial services.

However, US Fed minutes showed that the bank expects a mild recession this year. As a safeguard, benchmark interest rates can be left unchanged for a period of time.

“The Fed’s focus on fighting inflation will likely continue to weigh on cryptos in the near term,” the research team at crypto exchange CoinDCX told Business Standard.

According to crypto exchange WazirX, in the coming months, institutional investors may continue to enter the crypto industry, driving market sentiment to new highs.

“This could have a chance of improving spot trading volumes on exchanges that have been impacted as futures trading volumes continue to grow,” its spokesperson said.

According to Edul Patel, co-founder and CEO of Mudrex, “Currently, the immediate support level is around $29,850, with expected resistance near the $30,280 level.”

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