BTC, safe haven crypto
Trade at your own risk. No Financial advice.
Market Outlook:
Something that has happened to the cryptocurrency prices the past couple of days is a decrease in the price, which could be explained by the global energy crises and a stricter monetary policy from the Federal Reserve (Fed). Another reason for this decline is the restrictions on the cryptocurrency economy, which has made the trading of cryptocurrencies more worrisome for investors.
The global energy crises causes higher energy prices which causes a further causes disbelief in the Proof of Work the mechanism that for example both the Bitcoin and the Ethetreum blockchain share, where it takes a lot of energy to power these blockchains. In extension are investors less likely to invest in a Proof of Work coin and therefore takes profits or sells these coins to make profits elsewhere. A structure Fed usually also leads to investors dumping high volatile assets such as crypto-currencies and tech company stocks. To invest in safe haven asset such as Gold and Silver.
On the cryptocurrency market can we see that Bitcoin serve as this safe haven asset for many people. Because of its deflationary status.
The Fed has now come out with plans on reducing the balance sheet and increased the interest rates, meaning that the ultra low interest rates from the Covid-19 pandemic were not justified. Something that has also been seen in conjunction with this is the United States supply chain issue has caused high inflation and to combat these two main issues is the Fed going to increase interest rates.
Signals:
Position: Long
Entry price: 37000 range
Price 1: 43000 range
Indicators:
EMA 50/200: This is the Exponential Moving Average for 50 days and 200 days. The EMA 50 shows signals off a downtrend and the EMA 200 is showing the same thing.
RSI: The RSI line is at 35 and shows signs of being oversold, while the average is showing a smoother line at 32 and shows signals of being oversold. This may be the case of a bottom, and after this bottom may we see a start of a trend and the price moving upwards.
BTC.D: The Bitcoin Dominance shows signs of Bitcoin starting to increase in price and the Bitcoin Dominance is doing the same thing, which causes investors to invest in Bitcoin. If the price of Bitcoin would fall, as the Bitcoin Dominance would increase would this in continuation cause investors to invest in fiat currency.
Analysis:
The EMA 50/200 is showing a downwards trend, which may stabilize and create the suspect zone.We can also see that the RSI is oversold and created a bottom and stopped, at a place where the price is unlikely to move more downwards. The one thing we still are waiting on before we can confirm this price movement is the Fed meeting happening today (26th of January).
Fear and Greed Index showing fearful investors and this can be seen in the BTC.D where the investors rather hold Bitcoin, fiat currency or low volatility assets such as gold to prepare for a recession. Something to note here is that some investors may see BTC as a safe haven asset and as the safest option on the cryptocurrency market.
Investors therefore choose to hold Bitcoin over a longer time period as Bitcoin also is deflationary, where the coin has zero inflation the coin instead can be seen as deflationary. Bitcoin is lime by code and has a limited supply, at 21 million coins with an increasing demand which makes the deflationary currencies grow in price. Bitcoin has three measurements to counter the inflation of price. Therefore can Bitcoin be seen as a deflationary crypto asset and a safe haven asset.
Market Outlook:
Something that has happened to the cryptocurrency prices the past couple of days is a decrease in the price, which could be explained by the global energy crises and a stricter monetary policy from the Federal Reserve (Fed). Another reason for this decline is the restrictions on the cryptocurrency economy, which has made the trading of cryptocurrencies more worrisome for investors.
The global energy crises causes higher energy prices which causes a further causes disbelief in the Proof of Work the mechanism that for example both the Bitcoin and the Ethetreum blockchain share, where it takes a lot of energy to power these blockchains. In extension are investors less likely to invest in a Proof of Work coin and therefore takes profits or sells these coins to make profits elsewhere. A structure Fed usually also leads to investors dumping high volatile assets such as crypto-currencies and tech company stocks. To invest in safe haven asset such as Gold and Silver.
On the cryptocurrency market can we see that Bitcoin serve as this safe haven asset for many people. Because of its deflationary status.
The Fed has now come out with plans on reducing the balance sheet and increased the interest rates, meaning that the ultra low interest rates from the Covid-19 pandemic were not justified. Something that has also been seen in conjunction with this is the United States supply chain issue has caused high inflation and to combat these two main issues is the Fed going to increase interest rates.
Signals:
Position: Long
Entry price: 37000 range
Price 1: 43000 range
Indicators:
EMA 50/200: This is the Exponential Moving Average for 50 days and 200 days. The EMA 50 shows signals off a downtrend and the EMA 200 is showing the same thing.
RSI: The RSI line is at 35 and shows signs of being oversold, while the average is showing a smoother line at 32 and shows signals of being oversold. This may be the case of a bottom, and after this bottom may we see a start of a trend and the price moving upwards.
BTC.D: The Bitcoin Dominance shows signs of Bitcoin starting to increase in price and the Bitcoin Dominance is doing the same thing, which causes investors to invest in Bitcoin. If the price of Bitcoin would fall, as the Bitcoin Dominance would increase would this in continuation cause investors to invest in fiat currency.
Analysis:
The EMA 50/200 is showing a downwards trend, which may stabilize and create the suspect zone.We can also see that the RSI is oversold and created a bottom and stopped, at a place where the price is unlikely to move more downwards. The one thing we still are waiting on before we can confirm this price movement is the Fed meeting happening today (26th of January).
Fear and Greed Index showing fearful investors and this can be seen in the BTC.D where the investors rather hold Bitcoin, fiat currency or low volatility assets such as gold to prepare for a recession. Something to note here is that some investors may see BTC as a safe haven asset and as the safest option on the cryptocurrency market.
Investors therefore choose to hold Bitcoin over a longer time period as Bitcoin also is deflationary, where the coin has zero inflation the coin instead can be seen as deflationary. Bitcoin is lime by code and has a limited supply, at 21 million coins with an increasing demand which makes the deflationary currencies grow in price. Bitcoin has three measurements to counter the inflation of price. Therefore can Bitcoin be seen as a deflationary crypto asset and a safe haven asset.
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