Bitcoin Weekly Update: Bullish Outlook Maintained Despite Macroeconomic Headwinds

Yerevan (CoinChapter.com) — Bitcoin uptrend stays on track after bulls survive the record $6 billion options expiry at the end of the last week, raising speculations about a potential price decline below $50,000.

Bulls championed the market sentiment with their hegemony over options bets. As on Friday, the expiration day, the spot bitcoin price surpassed $55,000, one of the most preferred call options’ strike target. Earlier that day, the cryptocurrency was trading just shy of $51,000, gravitated towards the bears’ put options strike price near $47,500.

“As March options have just expired, the April outlook is more bullish with nearly $2 billion in open interest and 0.79 put/call ratio,” noted Unfolded, a Twitter page focusing on market data and analytics.

The BTC/USD exchange opened in positive territory Monday, rising 2.26 percent to over $57,000 ahead of the London opening bell. Its gains partially came as an extension to a rebound that began Friday and continued staying higher during the weekend session. The bounce also coincided with a dramatic decline in the US stock futures.

Archegos Capital Management, an investment fund behemoth, unwound billions of dollars in holdings, triggering concerns among other investors that stocks in portfolio and banks who dealt with it could suffer sharp losses. S&P 500 futures dropped 0.5 percent while the Dow Jones Industrial Average futures slid 0.3 percent.

The US dollar index rose 0.1 percent.

Path Ahead

The path ahead for the Bitcoin market is windier.

On the one hand, a faster-than-expected economic growth in the US could limit the demand for the safe-haven assets, on the whole, affecting Bitcoin. On the other hand, fears of inflation caused by monetary debasement could keep long-term investors in the cryptocurrency markets, which typically boasts excessively about their anti-inflation features.

Craig Fehr, an investment strategist at Edward Jones Investments, notes that investors should protect their portfolios against the prospect of declines in the riskier markets, which includes equities and bitcoin. The chartered financial analyst recommends keeping a portion of capital in fixed-income instruments.

Therefore, a more cautious approach could limit Bitcoin’s gains, if not stop them from extending altogether. Loose monetary policies from the Federal Reserve, coupled with Joe Biden’s reported plans to boost government spending, continue to provide tailwinds to the cryptocurrency.

Bitcoin Price Outlook

Technically, Bitcoin expects to stay rangebound inside its Bull Flag formation this week, with no major news hitting the market. Of course, potential announcements from big corporates/financial institutions—concerning their new interest in cryptocurrencies—should not be ruled out either.

Key Support Level: the 50-day moving average (the blue wave in the chart above).

Key Resistance Level: The bull flag’s upper trendline.

Upside breakout target: $60,000

Downside breakout target: $48,000-51,000

Photo by Lloyd Blunk on Unsplash