- Bitcoin fumbles a day after President Biden signs the crypto executive order amid fears of rising inflation.
- All eyes will be on the Fed which is likely to be aggressive in its approach of raising interest rates to tame inflation.
A day after Bitcoin (BTC) recorded an 8 percent jump following President Biden’s executive order, it has retraced heavily today. Along with the broader crypto market, Bitcoin comes under pressure dropping over 5 percent and taking a dive under $40,000 levels. As of press time, Bitcoin is trading at $39,324 with a market cap of $745 billion.
Although the crypto executive order gave some boost to the crypto market, the concerns of rising inflation hover around. All focus shall be on the upcoming U.S. inflation which is likely to spike concerning the ongoing geopolitical crisis.
Last month, the U.S. consumer prices witnessed a 7.9 percent surge, the fastest in over three decades. This rising inflation data has put severe pressure on risk-on assets like Bitcoin and equity. As a result, we have been seeing strong volatility in Bitcoin over the last few months.
Over the last month, Bitcoin made a move above $40,000 levels twice but it couldn’t sustain for long. The volatility is likely to continue further knowing that the U.S. Federal Reserve can introduce interest rate hikes faster than expected amid the soaring inflation numbers.
Looking at Bitcoin’s technical chart, the $45,000-$48,000 is serving as a clear zone of resistance for Bitcoin. Also, Bitcoin’s 200-day moving average (DMA) looks far from reach. Crypto analyst Lark Davis wrote:
I don’t think that there is much to get excited about until we see #bitcoin cross back above this zone of resistance, and ideally back above the 200 day moving average.
I don’t think that there is much to get excited about until we see #bitcoin cross back above this zone of resistance, and ideally back above the 200 day moving average.
Until then, I will just keep stacking. pic.twitter.com/8568OhFyGl
— Lark Davis (@TheCryptoLark) March 10, 2022
A similar scenario in the altcoin sector
Along with Bitcoin (BTC), the altcoin space has entered a severe correction as well! Ethereum (ETH) too has corrected 5 percent in the last 24-hours slipping under $2,600. On-chain data provider Santiment makes an interesting observation for Ethereum (ETH). The ETH price is showing greater closeness to that of the S&P 500.
👀 #Ethereum is staying surprisingly close to the price of the #SP500. In fact, its correlation has been much more tight than #Bitcoin‘s own correlation with the #SP500 over the past month. Also, #gold has had a spot-on inverse correlation to both. 🪙 https://t.co/3TJH7zwjcd pic.twitter.com/BPatTroxGW
— Santiment (@santimentfeed) March 10, 2022
Apart from Ethereum, all of the top-ten altcoins have lost 4-6 percent on average. However, Terra’s LUNA has been showing strong resistance against this recent correction. The LUNA price touched $100 yesterday and is currently trading at $94. Analysts are saying that if LUNA manages to hold above $100, we can see it touching $120 very soon.
One of the biggest news currently has been the crypto executive order. President Biden has directed all federal agencies to coordinate and work together in setting up clear regulations. Besides, he has also asked agencies to work on central bank digital currency aka the Digital Dollar.
Analysts believe that crypto regulations can benefit the industry as a whole providing institution with clear entry and a secure environment to join the crypto space.
Read More: Bitcoin up 8%, Terra gains 21% as White House confirms Biden executive crypto order
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