What Lies Ahead for Bitcoin?

The threat of the U.S. economy sliding into recession put stress on the banking sector, and fear of missed opportunities (FOMO FOMO FOMO, an acronym for 'Fear Of Missing Out', is a potent psychological phenomenon that holds significant sway in the world of financial market trading. This invisible force is driven by the anxiety that others might be getting ahead while you're left out, creating a sense of urgency that can override rational decision-making. The feeling of FOMO can spark hasty, emotionally-charged trading decisions. Traders, gripped by the fear of missing a lucrative opportunity, might leap onto an accelerating FOMO, an acronym for 'Fear Of Missing Out', is a potent psychological phenomenon that holds significant sway in the world of financial market trading. This invisible force is driven by the anxiety that others might be getting ahead while you're left out, creating a sense of urgency that can override rational decision-making. The feeling of FOMO can spark hasty, emotionally-charged trading decisions. Traders, gripped by the fear of missing a lucrative opportunity, might leap onto an accelerating Read this Term) revived interest in digital assets. On a year-to-date basis, the BTC/USD pair soared over 42%, briefly breaking through the $30,000 level, whereas ETH/USD rose +35% to $2,100.

Stocks related to the cryptocurrency sector, such as Coinbase, Microstrategy, Bitfarms, and Marathon Patent Group, Inc. also benefited greatly, adding a few percentage points. The only losers were investors with short positions - a surge in Bitcoin value resulted in over $175 million in liquidations within 24 hours.

Further new highs?

Let us say it this way, more challenges lie ahead. Just a couple of months ago, the market was on the verge of one of the biggest crises in its history thanks to mounting regulatory pressures, the de-peg of USD Coin (USDC) and Dai (DAI) from the US dollar and the surprise ban on Binance USD (BUSD).

As for the latter, in early March, the New York state financial regulator ordered the firm Paxos to stop issuing one of the “pillar” stablecoins - BUSD. The problem was that the coin accounted for almost 35% of Binance's trading volume.

If the regulator proves that BUSD is an unregistered security, other coins backed by fiat currencies (USDT and USDC) could also be affected. The fact the U.S. Commodity Futures Trading Commission (CFTC) sued the platform, along with its CEO and former top compliance executive, does not add to the optimism of the situation.

Keep your eyes open for …

Currently, investors remain attentive to the US economic situation. Although inflationary pressures are finally easing in the country, the regulator is unlikely to change its tune overnight. Yet another round of risk-off in the stock market, in turn, could spread to crypto assets.

Speaking of the outlook, we seem to be in the "calm before the storm." A new wave of attacks by the SEC and, precisely Gary Gensler, could weaken the market 'Bullishness.' If you fear further correction, consider closing part of the position.

As for the macroeconomic events, apart from Williams, Waller, Bowman, and Bostick talks, the Beige Book will be released on Wednesday. A decline in the regulator's assessment of the current economic situation in the country could be perceived by the market as a signal for a change in monetary policy.