Bitcoin had a positive weekend after it’s recent plunge to $50000. What’s next for bitcoin?
According to the data, Bitcoin still has plenty of room to run this period, while April price gains can “rely on” consumers saving and deferring debt payments.
What’s in Store for April?
According to on-chain analytics service Glassnode, April’s price success would “rely” just as much on retail investors as it will on institutional investors.
Glassnode’s most recent study, published last week, revealed an unusual disparity between U.S. consumer spending and disposable income generated by coronavirus lockdowns.
Normally closely related, the two indicators of retail investor buying power diverged with the onset of lockdowns — there was more capital, thanks to stimulus checks and other factors, but nowhere to spend it.
With reopenings gaining traction in a number of states, the equilibrium is set to be restored as pent-up market demand becomes a major narrative.
Many households now have an extra buffer of income to spend, due to new stimulus checks and decreased spending during lockdowns,” co-founders Yann Allemann Jan Happel tweeted. “Will they invest this into markets or pay off debt? Bitcoin’s April performance will depend on it.”
A simultaneous blog post affirms that the most recent stimulus checks, worth $1,400, have yet to make their existence felt in the economy.
“It’s difficult to measure to what extent the checks have arrived in households until today, and more importantly how willingly retail is going to spend or save the money this time considering it may be the last monetary stimulus for a while.”
Bitcoins RSI Movements
BTC’s relative strength index (RSI), which calculates the speed of price fluctuations for a given commodity, has not yet reached its height, according to PlanB.
“The monthly RSI for Bitcoin isn’t even 95. We had at least three months above 95 in the bull markets of 2011, 2013, and 2017. “It’s still early.” he said
Despite its recent struggle to remain above $60,000, the analyst who first applied the stock-to-flow formula to Bitcoin believes the top cryptocurrency’s bull market is only getting underway.
Stock-to-flow meanwhile demands a $100,000 or $288,000 average BTC/USD price this halving cycle, hanging on the exact model used.
Fear and Greed : Market Sentiments
Fear & Greed measures how the market feels about Bitcoin price behavior on a scale of 0 to 100, inferring whether recent activity indicates a rebound off lows or a sell-off from highs.
The Index, which circled all-time highs alongside BTC/USD in February, flashed warning signs as it rose to previous all-time highs of $58,300. By March 1, the rebound had slashed its ranking from 94/100 to 38/100, only to return to the mid-70s days later.
At the time of writing, the Index measures 74/100, classified as “greed” among investors, but still with much room for leeway before entering sell-off territory, denoted as “extreme greed.”
Stock and Trade Market
As concerns grow about the effect of Friday’s $20 billion worth of block trades, Monday will be an interesting start for US equities.
The sudden arrival of orders targeting mostly tech stocks, which came from major players Goldman Sachs and Morgan Stanley, has given traders a headache. This will now play out as Wall Street reopens on Monday.
“Traders everywhere know the story and will be glued to their screens,” portfolio manager Sharif Farha told Bloomberg.
Stock markets uncertainty has a knock-on effect for Bitcoin, but the magnitude of that effect depends on changes that are uncertain at the time of writing.
Andreas Lipkow, a strategist at German bank Comdirect, said, “The markets could start trading in a friendly manner at the beginning of the week.”
“Although there is currently some major profit-taking and unusual block trade activities, these market asymmetries can currently still be processed well.”
Additional factors include falling oil prices, but this is less of a concern for Bitcoin bulls than it is for stock bulls. Prices are dropping as hopes of a supply increase grow, thanks to an Opec+ meeting later this week and the possible resolution of the Suez Canal crisis.