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5 things to watch in Bitcoin this week

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The cryptocurrency space is always changing, and if you’re looking for the bleeding edge of Bitcoin, Ethereum, or any of the lesser-known cryptocurrencies, you’ve come to the right place. Our community of cryptocurrency enthusiasts keep tabs on everything from the latest Bitcoin news to cryptocurrency charts and projects.

As bitcoin continues its rise in popularity, we want to take a look at what the week ahead could bring to the world’s most important cryptocurrency. Bitcoin has been under an enormous amount of scrutiny in the last year, most notably when its price skyrocketed followed by a serious crash, and then a staggering comeback. So, what’s on the agenda for the week ahead?

As the new week begins, bitcoin (BTC) is challenging familiar but important historical highs from March 3. The month of May reached $58,000.

After a surprising rally on Friday, the largest crypto-currency fell slowly throughout most of the weekend. However, the tide turned on Sunday, and now BTC/USD is fighting resistance around $60,000 again.

Cointelegraph looks at what the next few days could have in store for the price of bitcoin, and five factors that could help influence it.

Bitcoin ignores DXY’s rise

With major markets closed for the May holiday, commodities and stocks are sending fewer signals than usual.

Asian shares suffered losses sparked by several issues, including India’s ongoing Covid 19. Meanwhile in the US, the S&P 500 futures are already catching up with Friday.

Unlike bitcoin, markets have reacted poorly to rumors of a possible reduction in tax support for some banks – they were a key part of the S&P’s record performance last year.

Along with this move, the strength of the dollar changed, with the US Dollar Index (DXY) posting impressive gains after a month of declines.

One-day candlestick chart of the U.S. dollar currency index (DXY). Source: View of the shop

As Cointelegraph reports, the DXY and bitcoin are usually inversely correlated, but last Friday proved to be another notable exception. Over the course of the day, BTC/USD seemed to rise out of nowhere and exceeded $58,300 before rebounding.

Inflation remains a major issue – senior US officials believe trillions of dollars in stimulus measures will have little effect, while others disagree.

Points rally continues to next stage

Another day, another quick return of bitcoin.

Just one week after recovering from a plunge to around $46,000, the price of BTC continues to gain ground from levels at the end of last week.

Most of the weekend was emotionless, but Monday saw a buying frenzy sparked by Warren Buffett, the arch nemesis of traditional markets.

At the time of writing, the BTC/USD exchange rate has passed $58,300 – where it reached an all-time high in February – and continues to rise, hovering around $59,000.

1-hour candlestick chart of BTC/USD (Bitstamp). Source: View of the shop

5 things to watch in Bitcoin this week

Analysis of the buy and sell order book on the main Binance exchange shows that resistance at $60,000+ is still strong, and that bulls will need to break through several walls of sell orders to break out of the current all-time high at $64,500. Another big hurdle is the $68,000.

On the support side, the picture is less solid, with $52,000 being the highest firm level among traders, followed by $50,000 and $48,000.

BTC/USD (Binance) Buying and selling rate. Source: Material displays

5 things to watch in Bitcoin this week

Nonetheless, the appetite for bitcoin could enter a new upward phase if the stock of stablecoins on the exchanges is replenished. Against the backdrop of huge pressure on these assets, this trend points to significant demand from buyers, contributing to a rise in spot prices.

Stable coins go back into the stock market. You know what that means, says analyst Ian Wustenfeld.

Friday’s rise was fueled by genuine buying among cash traders, while leveraged trading declined.

Cat and mouse with Ethereum

Another theory is that bitcoin is simply following the evolution of the altcoin scene, led by Ethereum (ETH).

The results have exceeded expectations – ETH/USD is now over $3,000 and up 28% in the past week, compared to 11% for bitcoin.

Predictably, this has further reduced bitcoin’s market dominance, which now stands at 47.7% – its lowest level since July 2018.

Charton the market dominance of cryptocurrencies. Source: CoinMarketCap

5 things to watch in Bitcoin this week

I wouldn’t be surprised if we see $3500ETH this week, a popular Crypto Chase trader predicted on Twitter, along with another rise in bitcoin.

ETHUSD is coming out of an upward consolidation phase + ETHBTC still has room to go (now at 0.053, resistance at 0.058).

The glassnode blockchain monitoring resource, meanwhile, has noted the strength of Ethereum’s declining network value-to-transaction (NVT) ratio, which is consistent with the organic exchange volume driving price growth.

When the price of $ETH reaches $3,000 and establishes a new ATH, the NVT ratio will return to the lows of this cycle, the company said on the attached chart.

Low NVT ratios indicate large transaction volumes growing faster than the market value of the network. The strength of today’s market is supported by the volume put on the channel. AnnotatedEthereum NVT ratio chart. Source: Glasnode/Twitter

5 things to watch in Bitcoin this week

Treasure Hunt Basic

Let’s get back to bitcoin and the network’s fundamentals, which are still catching up after being tweaked a bit in recent weeks.

This first manifested itself in the form of a short-lived drop in the hashish rate due to the floods in China. The complexity of the Bitcoin network then began to decrease to account for the loss of participants.

Since the complexity is adjusted every two weeks, it was necessary to wait until 1. May until it actually takes effect. This 12% drop is the largest since November of last year.

However, in this context, it is possible to increase the hash rate before mining again to increase competition and make the complexity positive rather than negative. It is still early – current estimates assume a further decline, this time of around -7%.

The hash rate has now fully recovered from the previous shock and is at 161 hashes per second (EH/s). According to the monitoring tool MiningPoolStats, it reached a peak of 168 EH/s.

Greed returns to the market

With new developments comes the usual change in sentiment, and market players become eager.

That’s according to the popular cryptocurrency fear and greed index, which moved back into greed territory Monday after more than doubling since late last week.

The index uses a basket of factors to create a normalized score from 0 to 100, which indicates how greedy or fearful the cryptocurrency markets as a whole are on any given day.

Crypto Fear & Greed Index. Source: Alternative.me

5 things to watch in Bitcoin this week

Its indicators generally point to the presence of a price floor or, on the contrary, an imminent sale. However, at the 61/100 level, the index still has room to go before a local top is announced – extreme greed has yet to manifest itself.

This source has been very much helpful in doing our research. Read more about bitcoin news and let us know what you think.

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