Patience is a rare commodity in the world of cryptocurrencies. Just two weeks ago Bitcoin gained 15%+ to make the jump from $37,000 to close to $42,000, but traders and retail investors soon became jittery at the range movements of the world's largest cryptocurrency in the two weeks since.
"Do something!" is a prevailing sentiment on the internet, as some resistance has occurred at the $43,000 resistance level over the past two weeks. But be careful what you want, as yesterday's latest setback put Bitcoin in the opposite position, potentially testing the $38,000 support level.
Of course, most markets are waiting and seeing because the political climate is being carefully regulated around the world. More specifically, Putin is playing the world's most dangerous chicken game on the Ukrainian border, with the market keeping an eye on developments in Eastern Europe. Cryptocurrencies aren't the only stakeholders, with the S&P 500 closing down more than 2% yesterday as the doomsday scenario appears to be significantly more likely. Bitcoin plummeted from nearly $44,000 to its current position, just above $40,000.
As if the potential of World War III wasn't dire enough, the three words most feared in any investor's dictionary and have gained a lot of airtime recently: rate hikes. Following January's inflation rate boom, the highest since 1982, the market is now setting a seven-fold increase in 2022. In other words, this is the last time - the party, held so gracefully over the past few years by the Fed, looks like it's coming to an end.
One of the main narratives driving the crypto surge is the inflation hedging angle; Ways to avoid lowering fiat currencies due to aggressive money printing. With the Fed now showing this hawkish turn, the driving factor of inflation will be undone. Combining this bearish development with the political situation in Europe, the notoriously volatile Bitcoin is a tense place.
Warren Buffet said, "Fear when others are greedy and greedy when others are afraid." Well, people are definitely freaking out right now, and with Bitcoin in the top one red candle to test the $38,000 resistance, it makes for an interesting close of the week. The $43,000 resistance looks very far away right now.
However, we all know that one comment from Putin, somehow, can make all this moot. Against that backdrop, it's no surprise to see Bitcoin in the range between $38,000 -- $43,000... for now.