Bitcoin prepares for possible storm in the market

Bitcoin and the whole crypto market will face several macro storms approaching next month. Leading analysts report that cryptocurrency is looking towards a turbulent few weeks of fluctuating prices as the “storm clouds” approach.

On-chain data provider Glassnode cited a warning on their latest report. According to them, “numerous macro headwinds” can significantly impact the price of bitcoin next month. Some of the major factors playing are the possible war in Ukraine and the tightening of the Fed policy.

While the traders and investors are getting braced for the upcoming price uncertainties, the data based on the report suggest that the market has matured remarkably over the last year. This shows no indication of a potential mass exit, which would incite a fear-driven price crash.

Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on a PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/File Photo/File Photo

While stocks plunged a few weeks ago, crypto prices also dropped. Bitcoin sinks at almost 13% before bouncing back along with stocks.

Even Ethereum was also down by just 15%.

Even going back to the start of this year, Cryptocurrency was in a slump. At the rough start of 2022, the price slides have caused huge wealth to wipe out. In total, Bitcoin had lost 20% in value. At the same time, Binance Coin and Ethereum had dropped about 25 percent and 30 percent.

Although cryptocurrency has already experienced intense volatility these past few months. With crypto soaring at an all-time high above $68,000 in November and below $34,000 in January.

One of the analysts’ reports stated, “On-chain supply dynamics are remarkably stable, a likely indication that investors are prepared to ride out whatever storm lies ahead, preferring to utilize derivatives to hedge out risks.”

Representations of cryptocurrency bitcoin and Ethereum placed on U.S. dollars in this illustration, January 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Fluctuating Rates

“Overall, this speaks to the continuing maturation of the Bitcoin market, as liquidity deepens and more comprehensive risk management instruments become available. This differs greatly in comparison to historical Bitcoin market cycles where de-risking was possible only by the sale of coins in spot markets.”

While the careful approach could cause the risk of volatility, investors can continue to acquire and stick to bitcoin despite the price changes. Their ability to stay up against the “prevailing headwinds” will determine the future of the crypto market in the next few months.

In The Independent interview, Marcus Sotiriou, a UK-based digital asset broker GlobalBlock. “The market is eagerly waiting to find out the minutes from the federal reserve’s latest policy meeting.” These minutes might signify how strict and aggressive the Federal Reserve will be. Which shows a potential price hike this March.

While some experts look at this falling rate, Bitcoin is likely to have support in the short term. Even if the selling continues, surviving this market onslaught can set a new run that will create a new all-time high of $70,000 in the mid-to-long term.

On a side note, the Glassnode report was also noted. The long-term running rehabilitation of defunct Mt Gox funds exchange could have a major impact on the market. This is if the trustee begins to sell.