Bitcoin (BTC) started the day on Wall Street with a rally above $41,500 on March 21, as last week’s gains held.
McGlone: The Fed is saying “don’t buy the dip”
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD advanced $500 at the open on Wall Street to see a strong start after its best weekly close in four weeks, but the progress was short-lived.
In the midst of a stock market in the green numbers, The largest cryptocurrency showed mixed signals on shorter time frames as traders waited to see how long the current trajectory could hold.
For popular Crypto Ed trader, the area around $41,500 was essential as a potential pivot point; A bounce and continuation could follow, providing an opportunity for the longs, but a loss would mean a trip below the $40,000 support.
In his latest YouTube update, identified $37,000 as a potential downside target.
Analyzing the 4-hour chart, on the other hand, trader Pierre called the $40,800 to $41,200 zone “levels to watch.”
“On the longer time frames I think we will see a bounce today (breakout and we teleport to $42,000-42,500),” concluded in the latest post in a Twitter thread dedicated to spot price action.
Regarding the macroeconomic outlook, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, provided some worrying news for those who expected the stock market rally to last much longer.
“So we have the most spread stock market in 20 years relatively… the most expensive stock market in terms of GDP in the history of mankind, the most expensive stock market versus real estate and versus global equities in all the time … and part of that is that it’s been driving inflation and the Fed has to get that inflation under control,” said Monday on the podcast Wolf of All Streets.
“So to me, that’s the key point of the puzzle this year, that if it doesn’t get filled, I mean if the market goes down about a third, then that’s going to be a problem.”
For this reason, there was already a bet on a significant stock market correction, and the positive correlation of Bitcoin made the losses of the holders a significant drag.
Next, McGlone pointed to hints from Fed Chairman Jerome Powell that new Federal Open Market Committee (FOMC) meetings could see more aggressive interest rate hikes to curb inflation.
“That was my warning – to people who still don’t get it: ‘Don’t buy the dip’; that’s for people who haven’t learned their lesson.” said.
On Bitcoin specifically, he gave a target of $100,000 in the future, but that the market “could easily see $30,000 first.”
Germany exposes the dangers of inflation
Before the Wall Street open, more hard-to-digest macro news came from Europe.
Despite the recovery in European stocks in the face of the month-long war between Russia and Ukraine, the inflation figures showed the magnitude of the headache facing policymakers.
On Monday, the market commentator, Holger Zschaepitz, focused on the producer price index (PPI) for Germany.
“German PPI soars 25.9% year-on-year in February, marking the biggest increase since statistics began in 1949. Non-energy PPI rose 12.4% year-on-year,” warned.
Just like BTC, gold was also biding its time to look for direction, regaining lost ground on its downside candlestick on Friday and trading around $1,934 at time of writing.
As for altcoins, flat performance dictated the mood, with none of the top ten cryptocurrencies by market cap advancing more than 5% on the day.
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