Bitcoin has managed to break above considerable resistance and now trades just north of the $44,000 mark. The first crypto by market cap took another swing at the low of its current levels, after a rejection near the $46,000 mark.
BTC with bullish momentum on the daily chart. Source: BTCUSD Tradingview
As NewsBTC has been reporting for the past weeks, Bitcoin was poised to see a relief rally, at least in the short term, when it reached the high area around $30,000s.
Although the situation between Russia and Ukraine seems to be escalating, the market appears to be pricing in any event to the upside. Both parties seem to have incentives to prevent a full-on conflict, a scenario that could prove unfavorable for the global markets.
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Yesterday, Bitcoin saw a low near $42,000, but buying pressure propelled BTC’s price above $44,000 where a lot of ask orders were concentrated. A portion of these orders was removed and added higher, per data provided by Material Indicators.
Unless bulls continue to display strength or these ask orders are removed/fill, as seen in the chart below, BTC’s price could see a local resistance and a potential short-term pullback.
BTC’s price (in blue) breaks above considerable resistance (ask order above price). Source: Material Indicators
If momentum maintains its current course, Bitcoin could quickly approach the $50,000 mark as there seems to be little resistance above $45,600. In this scenario, bulls could score more gains, but flipping the next area of resistance into support will be decisive.
On the Russia-Ukrainian situation, Material Indicators commented the following via their Twitter handle:
Not sure if the reports from Ukraine: Russia are accurate or if Putin is going for the sucker punch strategy, but the markets seem to like the reports
The FED Policy Could Be Bullish For Bitcoin?
Talking about the recent bullish momentum, QCP Capital, claimed BTC’s price saw an increase in resistance as the U.S. published its recent Consumer Price Index (CPI) metrics.
Used to measure inflation in the U.S. dollar, the metric has been scoring higher. Previously it used to operate as a tailwind for Bitcoin, but recently it has shifted to a headwind as it could accelerate the interest rate hike by the U.S. Federal Reserve (FED).
However, QCP Capital warns on a potential danger that has been dismissed by the market, Quantitative Tightening (QT):
While the market has been fixated on rate hikes, our primary concern has actually been Quantitative Tightening (QT), which is the shrinking of the Fed balance sheet. More specifically, we want to know how QT will be carried out.
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Depending on how the FED executes its QT policy, either by selling assets or by letting “securities mature without replacing them”, the market could react to the upside or with more bearish price action. QCP Capital believes a passive QT policy will be bullish for Bitcoin and the market.