- Bitcoin makes quiet gains for 5 consecutive days without much fanfare and even as other risk assets have been hit with elevated volatility
- Bitcoin continues to surprise with its rise in the face of multiple sources of uncertainty, from central bank policy tightening to geopolitical risks in Ukraine
Now that the US$40,000 level is in the rearview mirror, traders are attempting to scale the next psychological barrier for Bitcoin at US$45,000 with the macro picture far from favorable.
With U.S. inflation data out on Thursday widely to continue showing that inflation in the U.S. remains persistently high, some traders are taking profits off the table after the recent move for Bitcoin past US$45,000.
Chart watchers will nonetheless note that Bitcoin has moved above its trendline from its November highs and so a bit of a retracement is not altogether unwelcome, providing an entry point for traders who missed the ferocity of the earlier push past US$45,000.
Not helping matters as well has been the weakness in U.S. tech stocks, which Bitcoin has demonstrated a strong correlation to over the past several months.
Bitcoin and the Nasdaq 100 have a correlation of 0.43, but as recently as January saw a figure as high as 0.66, the highest since 2011, with 1 representing two assets moving in lockstep.
The hawkish pivot from the U.S. Federal Reserve, surprisingly resilient U.S. job numbers despite concerns over the Omicron variant affecting employment figures as well as rising inflationary pressures are all weighing on risk appetite for both stocks and cryptocurrencies.
Nonetheless, Bitcoin has moved above its 50-day moving average and a key resistance has been found at US$45,000, meaning that rangebound trading of the cryptocurrency between US$40,000 to US$45,000 is likely to persist in the coming weeks.
In the unlikely case that U.S. inflation data is not as dire as most economists expect, or if the Fed makes any indication that any decision to tighten is likely to be gradual, Bitcoin could see a further push higher.
