Two key BTC price metrics suggest BTC is primed to reclaim $40,000

The cryptocurrency market has been volatile since the beginning of the year as bitcoin crashed to the $30,000 price range.

However, the market quickly recovered with a sharp surge and gained a price increase reaching the $38,000 region on the 25th of January. Visit official site

The following day, the bulls had the strength pushing the digital currency to the $38,000 price range. While factoring in the highs and lows, Bitcoin was able to gain a little over 1.6% in the last week of January 2022. 

Meanwhile, even with the significant price consolidation, the average liquidation on futures contracts was quite low. Buyers had a liquidation of approximately $565 million while sellers faced a liquidation of $700 million.  According to the data made available, the bitcoin futures represent 41% of the total market liquidation of $1.25 billion. 

Regulatory storms could be hindering Bitcoin’s price recovery

The overall market capitalization of the crypto market showed a modest weekly increase of 1.6% alongside Bitcoin’s rendition. 

Take note of how the price formed higher lows on the 24th of January and strong support has been established at the $1.75 trillion regions. This means that even with the price plummeting by 22% just this year, the overall market capitalization of the crypto market indicated a healthy 12% surge since the 24th of January. 

Investors and traders now seem to be following the regulatory news to catch the latest development ts. Ted Budd, the United States Congressman, submitted a proposal to eliminate the bill provision that enables the U.S Treasury to ban specific financial transactions absent public efforts. 

If the proposal is passed, the America COMPETES Act of 2022 would have a considerable negative impact on the crypto industry, affirmed Jerry Brito, the Coin Center’s executive director Jerry Brito stated.

Both investors and traders were devastated by the news that the Bidden administration was getting ready to carry out an executive order on crypto. The executive order is said to see crypto as a threat to National security. 

Metaverse tokens decoupled after last week’s Apple news

While that trend has been bearish for most tokens and digital coins, there have been some stellar achievements from Metaverse tokens. 

On the 27th of January, The CEO of Apple, Tim Cook asserted that the metaverse all has lots of potential and that the Apple brand will blockchain investing in virtual reality on its latest development. 

For many investors, the news was enough to determine the direction of the market. Within a few days, metaverse coins such as Flow, Sandbox, Enjin Coin, Arewerw, and Decentraland experienced a major surge of about 36% increase in price. 

Meanwhile, Terra was negatively impacted following an announcement from Wonderland Money (TIME), a reserve currency based on the Avalanche.  The team behind the project announced that a proposal is under consideration to determine if the project will be abandoned. To this end, the stable coin crashed below 1.00 and many believe that the situation may have also impacted UST Token and Terra’s LUNA. 

Interoperable, quality, and scalability blockchain solutions Fantom (FTM), Harmony (ONE), and Cosmos (ATOM) gave negative actions after Ethereum’s hash rate exceeded its all-time high of 1.11PH/s. Generally, a higher hash rate implies that miners are participating in the network which helps to improve blockchain security.  

Tether premium and CME futures showed improvement

The OKEx Tether premium evaluates the differences between P2P trades based in China and the standard US dollar. Ideally, crypto figures that exceed 100% translate to excessive demand for crypto investment. Meanwhile, a 5% discount primarily reflects high selling activity. 

The indicator also revealed strength as it exceeded 99% in the last week. This is quite the opposite in the first week of January when traders in China panicked and sold, driving the indicator to a 4% discount.  

To verify that the structure of the crypto market has improved, traders then need to evaluate the CME’s Bitcoin futures contracts premium. This standard evaluates the differences between the current spot prices and long-term futures contracts in regular markets. 

Considering that the average market capitalization of cryptocurrency has dipped by 22% this year alone, maker structure now looks ripe for a proper recovery. 

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Stevie Flavio
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