It happened last weekend when Bitcoin had managed to close above $ 40,000 for the third time since January 8th.
But once again the benchmark cryptocurrency was lured into a bull trap by day traders who sold off said levels to secure short-term gains
As a result, Bitcoin opens the new week in negative territory, with traders still judging short-term market tilt versus a basket of macro fundamentals, most notably the recent surge in US 10-year yields above their January 11th high.
A sell-off in the bond markets usually has a negative impact on safe-haven assets like Bitcoin and gold, which generally don’t generate any returns.
However, traders in the cryptocurrency space expect larger upward moves. That’s because of the Fed’s decision to keep its base rate near zero through 2023 and buy government and corporate bonds at the rate of $ 120 billion a month until the economy hits maximum employment.
Meanwhile, analysts note that US President Joe Biden’s $ 1.9 trillion coronavirus package would put pressure on the US dollar. In return, the aid would encourage investors to seek protection from greenback-triggered consumer price inflation, which could drive Bitcoin prices higher.
So far, inflation expectations have poured cold water on the safe haven rallies.
Economic recovery offsets Bitcoin’s bullish bias
A rise in benchmark returns pushed the price of gold down as it marked renewed risk optimism in the market.
Investors instead moved capital to risky assets, sending the US benchmark S&P 500, blue-chip Dow Jones and tech-savvy Nasdaq Composite up 4.65, 3.89 and 6.01 percent respectively last week after a stronger economic Recovery for the US was expected.
(For Bitcoin also buy bitcoin cheap manual ) increased during the same period, but its rally was triggered by a speculative mania that was triggered by the open endorsements of Tesla and SpaceX founder Elon Musk. The cryptocurrency reached $ 40,000, as mentioned above, but only briefly, which indicates bullish uncertainties that are above said resistance level.