Bitcoin (BTC<\/a>) starts a new week struggling to preserve support as key macro changes appear on the horizon.<\/p>\n In what could turn out to be a crucial week for Bitcoin and altcoins\u2019 relationship with traditional assets, the United States Federal Reserve is set to be the main talking point for hodlers.<\/p>\n Amid an atmosphere of still rampant inflation, quantitative easing still ongoing and geopolitical turmoil focused on Europe, there is plenty of uncertainty in the air, no matter what the trade.<\/p>\n Add to that a failure by Bitcoin to benefit from the chaos and the result is some serious cold feet \u2014 what would it take to instill confidence?<\/p>\n Just as it seems nothing could break the now months-old status quo on Bitcoin markets, which have been stuck in a trading range for all of 2022 so far, upcoming events could nonetheless provide that catalyst for a sea change in both sentiment and price action.<\/p>\n Cointelegraph takes a look at the factors set to help move the markets in the coming days.<\/p>\n Fight it or not, the Fed is the likely kingmaker when it comes crypto performance this week.<\/p>\n On March 16, policymakers will decide whether or not to proceed with a key interest rate hike which has been expected since last year.<\/p>\n The Fed has a problem \u2014 inflation is running hot. But the desire to reduce its record balance sheet from two years of coronavirus excesses is too.<\/p>\n A rate hike is thus tipped to be only modest \u2014 perhaps a quarter of a basis point \u2014 but the implications could nonetheless be considerable for Bitcoiners.<\/p>\n BTC has already shown itself to be firmly attached to U.S. equities, and any knee-jerk reactions to the Fed will likely be copied.<\/p>\n Stocks are no friends of rate hikes, as the easy money period \u00a0accompanied COVID-19 reactions was something of a golden era that only ended in late 2021. This comes as the reality of the Fed\u2019s moves hit home. Bitcoin, likewise, saw an all-time high in November and then began a swift decline.<\/p>\n \u201cThis week will be big for crypto and equities traders, as the Fed is expected to decide on a quarter-point rate hike this week. Bitcoin & Ethereum have been pegged to the SP500 in 2022, and these decisions should impact cryptocurrencies greatly,\u201d analytics firm Santiment summarized<\/a> on March 14.<\/p>\n The Fed, however, is far from the only macro player for Bitcoiners to worry about. <\/p>\n In Europe, lawmakers are set to vote on cryptocurrency legislation, with some attempting to instigate a ban on proof-of-work (Poprotocols citing environmental concerns.<\/p>\n Tomorrow, March 14th, the European Parliament ECON Committee will vote on the MiCA, the regulation that will define the course of cryptocurrency adoption in the EU. #Bitcoin<\/a> may face discriminatory treatment due to PoW consensus. Thread<\/p>\n \u2014 Arnab Naskar (@Arnab_Naskarr) March 13, 2022<\/a><\/p><\/blockquote>\n While critics have already dismissed the idea as ludicrous, the threat to sentiment from a potential victory remains.<\/p>\n \u201cA PoW ban would be a ban on guessing a number,\u201d Knut Svanholm, author of Bitcoin: Sovereignty Through Mathematics<\/em>,\u00a0warned<\/a>. <\/p>\n \u201cThink about what such a ban would imply.\u201d<\/p><\/blockquote>\n Next door, the Russo-Ukrainian conflict continues to advance along with its economic fallout \u2014 Russia risks default, and sanctions and trade blocks are adding to inflationary pressures.<\/p>\n In China, meanwhile, COVID-19 itself is back on the radar with an increasing number of residents locked down.<\/p>\n As such, things are at best precarious for short-term Bitcoin traders.<\/p>\n Given that any one of the above macro factors could spark a fresh rout in equities, for many, Bitcoin felt like a sitting duck as the week began.<\/p>\n \u201cWe are yet to see the capitulation dip as per every other macro dip we have seen,\u201d popular Twitter account Crypto Tony argued<\/a>.<\/p>\n Such a capitulatory move has already been voiced<\/a> as a stark possibility, and the timing would be grim, coming almost exactly two years to the day that BTC\/USD crashed to $3,600 in the first round of COVID-19 mayhem.<\/p>\n Today is the 2 year anniversary of #Bitcoin<\/a>\u2019s supposed death. <\/p>\n Congrats to those who bought this dip, legendary stuff. pic.twitter.com\/2nA8Joithk<\/a><\/p>\n \u2014 Dylan LeClair (@DylanLeClair_) March 12, 2022<\/a><\/p><\/blockquote>\n As Cointelegraph previously reported, support levels remain unclaimed<\/a> as $40,000 refuses to hold for more than a few days or hours.<\/p>\n The weekly close saw a last-minute dip toward $37,000, BTC\/USD, nonetheless managing to reclaim much of the lost ground to trade at around $38,600 at the time of writing.<\/p>\n Analyzing the near-term prospects, fellow Twitter account Plan C turned to his Confluence Floor Model to conclude that a macro price bottom could be due in the coming month.<\/p>\n Such a low could fall at around $27,000, however. This would take Bitcoin below its 2021 opening price and briefly out of the range it has consolidated since then.<\/p>\n ⚠️ Very Important Post <\/p>\n The floor #Bitcoin<\/a> price of the accumulation phases was within 0-29 days, of the last 3 crosses<\/p>\n We had a cross 9 days ago, will history repeat? #Crypto<\/a><\/p>\n Last 3 times, resulted in a #BTC<\/a> price drop to my Confluence Floor Model, currently at $26,820. pic.twitter.com\/pcB3UgknUz<\/a><\/p>\n \u2014 Plan\u00a9️ (@TheRealPlanC) March 13, 2022<\/a><\/p><\/blockquote>\n \u201cI am not convinced we go to 27k, but if history repeats for a 4th straight time that could be the low of this accumulation phase,\u201d Plan C added on Twitter.<\/p>\n On the topic of accumulation, it appears that it is not all bad news when it comes to the demand for Bitcoin at current prices.<\/p>\n As Cointelegraph reported, whales have been active in recent days<\/a>\u00a0while the proportion of the overall BTC supply controlled by smaller investors has reached a one-year high.<\/p>\n Now, those habits are being reflected in the continued fresh lows in exchanges\u2019 supply.<\/p>\n The changes were noted by Philip Swift, creator of on-chain analytics resource LookIntoBitcoin, on March 1.<\/p>\n #bitcoin<\/a> balance on exchanges making new lows pic.twitter.com\/zgqfSMNuoZ<\/a><\/p>\n \u2014 Philip Swift (@PositiveCrypto) March 14, 2022<\/a><\/p><\/blockquote>\n Separate data from on-chain analytics firm CryptoQuant confirms<\/a> the trend and shows that out of the 21 major exchanges it covers, BTC balances are at their combined lowest since early August 2018 \u2014 2.32 million BTC.<\/p>\n The story with exchange balances is in fact fairly complex, as different exchanges exhibit different trends.<\/p>\n In the latest edition of its weekly newsletter, The Week On-Chain, released March 7, fellow on-chain analytics platform Glassnode devoted<\/a> significant attention to the phenomenon, noting that sell-side supply overall remains \u201cfairly modest\u201d given macro circumstances.<\/p>\n \u201cDuring the highly volatile macro and geopolitical events of the last few weeks, exchange net-flow volumes are also reasonably stable, despite a slight bias towards inflows this week,\u201d researchers noted at the time.<\/p>\n The latest Glassnode data shows that exchanges have since lost<\/a> another $1.9 billion in BTC in the past week.<\/p>\n Unsurprising, perhaps, but Bitcoin and wider crypto sentiment is pointing firmly downhill this week.<\/p>\n After two months of ranging and fakeouts, bulls are tired and the threat of a macro-induced capitulation hangs in the air.<\/p>\n \u201cBitcoin sentiment feels worse now than July \u201821 imo and price is over $8k higher now vs. the July \u201821 low,\u201d Twitter analytics account On-Chain College summarized<\/a>.<\/p>\n Examining<\/a> the on-chain reality this week, research, insight and education resource Cane Island Digital Research highlighted volume as another telltale sign that momentum had fallen out of Bitcoin.<\/p>\n \u201cBitcoin volume is a horrible indicator of price but it is a decent indicator of sentiment,\u201d it commented. <\/p>\n \u201cIt\u2018s hard to think that volume could go much lower, which means bitcoin must be close to a bottom.\u201d<\/p><\/blockquote>\n #Bitcoin<\/a> volume is a horrible indicator of price but it is a decent indicator of sentiment. It’s hard to think that volume could go much lower, which means bitcoin must be close to a bottom. pic.twitter.com\/6wWtsxLDHa<\/a><\/p>\n \u2014 Cane Island Digital Research (@CaneDigital) March 13, 2022<\/a><\/p><\/blockquote>\n While this could be an indicator of an incoming capitulation and trend reversal, the fear was still palpable.<\/p>\n Mark Yusko, founder, CEO and chief investment officer of Morgan Creek Capital Management, described<\/a> the Cane Island numbers as sentiment \u201cgetting close to washed out.\u201d<\/p>\n Meanwhile, The Crypto Fear & Greed Index\u00a0remains<\/a> in \u201cextreme fear\u201d territory, near the 20\/100 mark, which has acted as a line in the sand since mid-February.<\/p>\n Looking for a counterpoint to the seemingly endless bad news from macro sources?<\/p>\n Related:\u00a0Top 5 cryptocurrencies to watch this week: BTC, DOT, SAND, RUNE, ZEC<\/a><\/em><\/strong><\/p>\n It could well come this week in the form of El Salvador and the issuance of its much-vaulted ten-year Bitcoin bonds, known informally as the volcano bonds<\/a>.<\/p>\n The country which became the first to adopt Bitcoin as legal tender last year has since turned to geothermal energy from a volcano to mine BTC.<\/p>\n To that end, it is now seeking long-term investment partnerships by issuing bonds tied directly to mining \u2014 a move which has commentators excited about serious money potentially flowing into the ecosystem.<\/p>\n While the exact date of the bonds\u2019 issuance, expected to attract $1 billion, remains unknown, suspicions are mounting that it could come this week.<\/p>\n Aside from the benefits of using the cash to invest in BTC, the long-term consequences of El Salvador\u2019s plan, if successful, should be underestimated as a shift in the global economic paradigm, according to former Blockstream chief strategy officer Samson Mow.<\/p>\nRussia, China, inflation and the Fed<\/h2>\n
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Spot price \u201ccelebrates\u201d two years since COVID-19 crash<\/h2>\n
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Accumulation provides faint silver lining\u00a0<\/h2>\n
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Market sentiment impresses no one<\/h2>\n
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Blast-off for volcano bonds?<\/h2>\n