Bitcoin Maintains Steady Amid Economic Data; Traders Eye Price Consolidation
Summary:
Despite lower than anticipated U.S. unemployment claims and the Federal Reserve's plans to drop interest rates, Bitcoin (BTC) maintains a steady rate around $66,000. Well-known traders like Aksel Kibar and Bob Loukas predict a period of price stabilization or even a slight drop could prove beneficial for long-term growth. However, amid Bitcoin's recovery, on-chain metrics exhibited signs of panic amongst the broad investor base with the Spent Output Profit Ratio turning negative for the fifth time this year.
On March 21st, Bitcoin (BTC) seemed to disregard the latest unemployment figures from the United States, as speculators looked forward to a prolonged period of BTC price stabilization. Information from Cointelegraph Markets Pro and TradingView showed a steady BTC/USD rate around $66,000. This coincided with Wall Street's opening bell and lower than anticipated U.S. unemployment claims that were published after the Federal Reserve hinted at dropping interest rates amidst high inflation.
Traders perceived the Federal Open Market Committee's (FOMC) policy stance in their March 20 meeting positively, pushing the S&P 500 to record peaks and prompting a 12% increase in Bitcoin's value.
However, amongst this optimism, some traders advocated a cautious approach. Well-known trader Aksel Kibar, posting on X (previously known as Twitter), stated his preference for a consolidation phase. He warned that parabolic movements are not conducive to long-term trends, and a pause allows for wider investor engagement.
Kibar had previously suggested in March that he would welcome a period of sideways trading below the crucial $69,000 mark, preceding a surge to record highs. Echoing similar sentiments, fellow trader Bob Loukas hinted that even a drop to recent lows could prove profitable.
As Bitcoin recovered, on-chain metrics highlighted panic amongst the wider investor community. Decentrader, a trading platform, noted on March 20 that Bitcoin's spent output profit ratio (SOPR), a measure showing if transaction coins are moving at a gain or loss, turned negative for the fifth time this year.
Negative SOPR values signify more transactions occurring at a loss, with March 20 recording the highest negative day since October 2023. Despite this, it has been observed that larger BTC entities are still increasing their investments, while smaller investors seem to be selling.
Please note that this document does not offer investment advice or suggestions. All trading and investment decisions carry risks, so individuals should conduct their own research before deciding.
Published At
3/21/2024 6:43:17 PM
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