A move to $48,000 for bitcoin on Tuesday, March 29, was met with resistance at the 200-day moving average (DMA).
Currently, Bitcoin is experiencing a minor pullback and is trading at a price of $47,131, with a market cap of $895 billion, as of the time of writing this article.
Earlier this year, Bitcoin saw major price declines, and it was only during last week’s price rally that BTC was able to write off all losses for 2022. As we reported earlier, more than $230 million was liquidated in short positions on Monday, March 29.
This occurs as the Bitcoin spot volumes have surpassed Bitcoin futures volumes as BTC moved above $48,000. This plainly demonstrates that Bitcoin’s price rebound was mostly driven by the spot market.
Cryptocurrency Market Participants Stay Bullish
Although Bitcoin is experiencing resistance at its 200-day moving average, some participants in the cryptocurrency market remain bullish.
Kyle Davies, co-founder, and chairman of Three Arrows Capital, a cryptocurrency hedge fund based in Singapore, said:
There are “no more sellers left after several waves of bad news — leverage wipe-out, macro concerns, Ukraine war. So it’s natural for Bitcoin to have a strong bid here.”
Furthermore, earlier this month the Federal Reserve announced its first-rate hikes for 200. This was the first time in four years a rate increase was announced by the Federal Reserve. The U.S. Central Bank has also stated that the Federal government is planning for multiple rate hikes later this year. This news made the market become jittery and volatile.
But Jeff Dorman, Chief investment officer of crypto asset management firm Arca believes that as per historical trends, risk assets usually move higher in the aftermath of a rate hike. He added:
“The entire risk-assets selloff was way overdone and made no sense to begin with. Markets generally go higher during rate hikes, and it’s only at the end of a rate-hike cycle when markets typically go the other way.”
Bit Market Participants Amass Bitcoin
According to a report, Institutional capital inflows in crypto funds stood at a strong $193 million last week. Bitcoin alone dominated 50% of the total inflows.
On-chain data provider Santiment also reported “Bitcoin’s whales have been active today. The 3,266 transactions worth more than $100,000 that took place between 2 pm and 6 pm UTC were the most in a 4-hour interval since March 1st. Market prices peaked at just above $48.0k eight hours ago, and they have since dropped slightly to $47.3k.”