Bitcoin is Cautious this week

Bitcoin (BTC) started last week with a drop, then recovered strongly, but then fell again. Bitcoin is returning to the same range it was in at the beginning of the year. As a result, fear and uncertainty reign in the market again, and analysts’ opinions are still very divided.

According to Coinmarketrate.com, at the beginning of the week, the price of BTC lost control over the $40,500 mark, and then briefly dropped below $39,000. Subsequently, Bitcoin recovered, and on Thursday it almost reached the $43k mark. However, the price was rejected and returned to the level of about $40,500 on Friday morning.

However, on Friday afternoon, Bitcoin could not hold on to this mark and fell even deeper. Bitcoin briefly reached around $39,350, and then recovered slightly. Yesterday, the price rose twice to a peak of $39,950, but then fell to $39,500.

Now the price of Bitcoin is barely holding in the range of $39 – 40k. Thus, today Bitcoin is 0.5% in the black and 1.7% in the red compared to a week ago.

Correlation with Bitcoin Price

Many analysts have already warned of a possible bounce in the area between $42,000 and $43,000. However, this week’s decline was also accompanied by a new portion of fear. The chairman of the Federal Reserve System confirmed an interest rate hike in May to combat inflation. This caused the stock markets to redden, such as the S&P 500, with which Bitcoin has a high correlation, and the growth of the US dollar index (DXY), with which Bitcoin has a negative correlation.

Thus, the BTC price has again hovered in the sensitive zone. It is possible that Bitcoin is not sinking much deeper, because at the beginning of the year a lot of BTC was trading in this range, and this can provide significant support. As you zoom in on the chart, you can see that Bitcoin also continues to set a series of higher lows.

However, the price does not look very stable, and many analysts still fear a deeper drop and, possibly, a re-passage of the lows of the beginning of this year. We are talking about the fact that the price may drop to $30,000.

But do not discount that it was a big week for Bitcoin, more precisely, for its adoption. This is the appearance of Bitcoin ATMs at the MediaWorld exhibition in Austria, and the fact that Commerzbank has applied for a crypto license to work with BTC (and subsequently with other types of cryptocurrencies).

So, it’s been a very interesting week for the Bitcoin world, and some very important news about user rights and altcoin adoption has also come from the altcoin market.

• Ridley Scott is producing a film about Ethereum

One of the legends of the history of cinema will produce a film about Ethereum, which will be an adaptation of Camila Russo’s book “The Infinite Machine”. It is a real revolution to bring the history of the ecosystem headed by Vitalik Buterin to big screens around the world.

• For Solana, Cardano, Ethereum and Polkadot – ETN from Bitpanda

Great news for European investors, or at least for those who do not want to buy cryptocurrencies directly on exchanges. Bitpanda has actually announced the creation of four ETNs that reproduce the price dynamics (physically, and therefore through direct purchases) of SOL, ETH, DOT and ADA. This indicates that interest in the entire sector is also growing in Europe – in this case, on the German stock exchange.

• Fidelity Arrives on Decentraland

The Metaverse sector also showed good signs: Fidelity Investments joined Decentraland this week. This is something important, which indicates that it is difficult to talk about bubbles ready to explode. And in the coming weeks, no less important news for the sector will appear, both from Decentraland and from The Sandbox.

Despite the fact that the markets have retreated a bit, the news coming from the real world is very positive. The real world, which is generally less prone to reactions, less hysterical and less tied to what is happening between the Fed, NASDAQ and traditional finance.

Based on this, you should not worry too much about the movement of the military-technical cooperation, since there are at least five reasons for this.

5 reasons not to worry about the Bitcoin exchange rate

And so, we know that the BTC rate is a fussy “animal”, and sharp declines usually undermine your confidence. The most important thing is to clearly understand why you need Bitcoin in your portfolio. There are those who are so confident in the Cue Ball that it makes up 100 percent of their portfolio. However, it is also important to feel comfortable in everyday life, and not to experience constant stress about his course.

Are you too concerned about the price? Well, then, there is probably too much at stake, and you should sell part of Bitcoin, changing it to another crypto asset, say, Decimal Chain (DEL), which provides the possibility of staking, or creating an NFT. But enough of this, it’s time to tell about the reasons not to worry about the BTC exchange rate.

• Bitcoin Adoption Continues

On a daily basis, the price of Bitcoin can fluctuate greatly, and it is mainly determined by traders and human emotions. In the long run, however, it is the adoption of the network. More and more people are choosing to keep their savings in Bitcoin. Look at its price in the long run. Daily fluctuations are trifles, we are talking about the next 5-10 years.

• Companies with a listing and BTC

MicroStrategy, Tesla, Block and many other large companies are massively placing Bitcoin on their balance sheets to protect the company’s reserves from inflation. It is likely that in the coming years, the number of companies that have BTC on their balance sheet will only grow.

• El Salvador and Bitcoin

In 2021, El Salvador became the first country in the world to accept Bitcoin as a legal tender and even started buying a crypto asset. Currently, quite a few countries seriously intend to follow in the footsteps of El Salvador. Sooner or later, BTC will become legal tender in many countries. Its acceptance is growing on this front as well.

• Paying with Bitcoin in America

The main criticism of Bitcoin is its limited scalability. With 7 transactions per second, it is difficult to build a global payment network. The Lightning Network offers a solution to this problem, and recently many large companies in America have started using Bitcoin. Think of Starbucks, McDonald’s, Wal-Mart and many other large companies.

• American Spot Bitcoin ETF

Finally, it seems that the approval of a spot Bitcoin ETF in America is a matter of time. There are already several companies in Canada that have bought more than 60,000 BTC for investors in a short time. The US ETF market is interesting because it is about 20 times larger than the Canadian one, so the approval of the US Bitcoin spot ETF is likely to cause a huge wave of purchases.