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This Wednesday, March 9, the president of the United States, Joe Biden, signed an executive order ordering several federal agencies to examine the risks and potential benefits of cryptocurrencies in a coordinated manner, as reported in this medium.
Prior to the White House announcement, Treasury Secretary Janet Yellen’s opinion on the executive order was posted in advance on the Treasury website Tuesday night. There, the official emphasized the need that federal agencies take a single approach when generating regulatory guidelines.
Both Yellen’s remarks and the announcement of the signing of the executive order coincided with a 10% rally in bitcoin, which took the price of BTC above the $40,000 barrier on Wednesday, to even reach $40,000. 42,500. However, that same day in the afternoon, a rapid price pullback began that continued on Thursday. The price then returned to last week’s fluctuation around $39,000.
Pressing Opinion on Biden’s Executive Order
For the trader Eduardo Gavotti, the rise in the price of bitcoin last Wednesday should not be related to the signing of the executive order by the president of the United States. The specialist believes that the boom is more related to the recovery of global markets in recent days. He considers, however, that the executive order is positive for bitcoin and cryptocurrencies since it “elevates cryptocurrencies to a level of much greater consideration and seriousness within the financial system”,
The ecosystem around bitcoin received the announcement with optimism, in general terms, as reported by CriptoNoticias. In defining the priorities on cryptocurrencies, it is clear that the executive order does not contemplate the prohibition of bitcoin, as has been previously argued.
Bitcoin’s rise to $42K did not surprise traders
The rise of more than 8% in the price of bitcoin in a few hours last Wednesday resulted in liquidations of lesser magnitude than at other times of sharp price variations. On February 27, traders holding heavily leveraged short positions suffered losses of more than $130 million, while on March 3, a sudden price drop led to liquidation of long positions for more than $118 million. millions.
Bitcoin price floor is getting higher
The price of bitcoin has remained with a support level close to USD 37,000, as reported by CriptoNoticias. It has remained well above the minimum value of the year of USD 35,180, which occurred on January 22, according to the CriptoNoticias price index.
Despite the price drop, when reviewing the behavior of the price lows since the beginning of the year, they are on a path that is clearly increasing. This shows that the bitcoin price floor is getting higher and higher.
According to the thesis proposed by Alberto Cárdenas since 2021, on the formation of a large bubble led by the main assets, we would already be at the beginning of the great decline, but still at high levels. We would be going from euphoria to complacency, “closer to complacency than euphoria,” according to Cárdenas.
Bitcoin volatility increases
Data from Glassnode and Coin Metrics show that the volatility of the bitcoin price has increased in the last three weeks, in a behavior that coincides with the start of the Russian military offensive in Ukraine.
According to Coin Metrics, volatility reached its highest levels since last October. Despite the recent increase, current levels are lower than in 2021,
Recession in 2023? Bitcoin can make a difference
A publication on Medium by the analyst flix1, commented by CriptoNoticias, refers to an indicator that has successfully detected, with an anticipation of 12 to 18 months, at least six recession scenarios between 1980 and 2020.
According to flix1, the worst recession in the last 40 years is likely to occur in 2023, and indicates that bitcoin is a good alternative in the context of that crisis.