5 factors Bitcoin investors should watch this week

Bitcoin (BTC) started the new week at under $ 45,000 after Elon Musk re-mixed the market. So what’s next?

Cointelegraph took a look at 5 factors that could affect the Bitcoin price in the coming days.

Musk’s post causes bitcoin price decline

This week, there was another man who stirred up the market: Elon Musk. The CEO of Tesla and SpaceX caused a reaction in the market with his new negative post regarding Bitcoin.

The BTC / USD pair has depreciated after Musk announced last week that Tesla would suspend BTC payments. But that wasn’t enough for Musk.

Bitcoin Price Index: How much is 1 Bitcoin in TL? (BTC TL)

Tesla CEO also criticized Bitcoin’s decentralization in his posts over the weekend. However, he garnered the biggest backlash by giving clues that Tesla may be planning to sell his BTC savings. Bitcoin declined to $ 42,000 after this post.

Musk, In his post he shared on Monday “To make the speculation clear, Tesla has not yet sold any Bitcoin,” he explained.

BTC / USD chart highlighting Musk’s Twitter posts. Source: Twitter

As Musk’s conflict with the crypto community is increasingly turning into war, the surge of crypto money continues.

Bitcoin, which has lost over 9 percent in the last 24 hours, is trading at $ 44,640.

On the other hand analist Alex KruegerHe thinks that Musk’s post about the BTC sale may have been a bottom price signal for the coin without realizing it. With Musk’s post, Bitcoin fell to the key 61.8 Fibonacci retracement level ($ 42,845).

BTC dominance drops to 40 percent

Musk’s shipments had a devastating effect on both Bitcoin and altcoins.

Despite the constant praise of the businessman, even Dogecoin (DOGE) could not escape this fix.

Some cryptocurrencies, such as Cardano (ADA), have managed to get out of the downtrend. ADA even broke a record on Saturday.

Bitcoin’s market dominance, on the other hand, fell below 40 percent for the first time since January 2018.

Bitcoin market dominance chart. Source: CoinMarketCap

Bitcoin fundamentals give positive signals

While the price action is quite volatile, the network fundamentals are giving positive signals for Bitcoin.

Bitcoin became more attractive to miners after the price dropped to $ 42,000, and as a result, network security was stronger than ever.

Both the hash rate and difficulty have improved greatly in recent weeks, after the drop in hash rate led to their own price collapse.

The average weekly hash rate has exceeded 180 EH / s for the first time in weekend history.

Bitcoin’s 7-day average hash rate graph. Source: Blockchain

The network difficulty also expects to increase by 10 percent at the next automatic fix in 11 days.

Dollar returns from support

Besides the crypto industry specific indicators, the macro market can also provide an insight into the price performance of BTC.

The dollar, which depreciated last week, started the week by gaining strength again. The US Dollar Index (DXY) came back from a familiar support and began to pose a problem for BTC / USD.

1-day candlestick chart of the US Dollar Index (DXY). Source: Tradingview

On the other hand, inflation remains a key issue that worries investors.

Bitcoin still ahead of the last bull market

PlanB, the creator of the Bitcoin stock flow price model, pointed out that BTC still performed well from the 2017 bull market, which carried the crypto to $ 20k. The analyst explained that this holds true even though BTC’s drop to $ 42k is the biggest correction in this bullish cycle.

PlanB, In his post today, he talks about the emergence of Bitcoin Cash “Today, 2017 feels like a bull market (especially during the fork wars),” he noted.

“We will go to the next record level not in a straight line, but with high volatility (more than 30 percent correction likely). HODL. ”

Stock flow chart of the BTC / USD pair as of May 17, 2021. Source: Digitalik

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