The price of Bitcoin (BTC) starts a new week with a range around USD 9,000 while waiting for signals from the macro markets, what could be in store for the next few days?
Cointelegraph takes a look at the main factors that could affect the BTC price this week.
BTC compression is coming to an end
Stocks had an uneventful start to the week, and major stock futures are slightly lower on the day, a high of 0.6% at the close of this edition.
Bitcoin also had a quiet weekend, with negligible volatility and a narrow trading corridor that continues to characterize price performance.
On Monday, the BTC/USD hovered around USD 9,180, and had previously hit local highs of USD 9,226, its highest level since July 15.
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As has become commonplace in recent weeks, sentiment about the coronavirus and reactions to the associated corrective measures by governments and central banks dictate macro action, and Bitcoin remains susceptible to imitation.
With calm reigning before the opening of Wall Street, room for maneuver seemed limited, given the „compression“ in BTC/USD over the past few weeks.
A cycle of higher highs and lower lows, the current compression cycle showed few signs of breaking this month. As Cointelegraph reported, however, the status quo is ripe for change, and that should happen this week, analysts say.
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„This feels like some kind of little World Cup. #bitcoin could go off at or around 22,“ Jason Williams, co-founder of the Morgan Creek Digital cryptoscope fund, tweeted Sunday.
CZ: Don’t take safe haven status „too literally“
Investors should not treat Bitcoin as a safe haven „too literally“ in today’s market, says the CEO of the Binance cryptosystemic exchange.
Speaking to Bloomberg on July 20, Changpeng Zhao, known as „CZ“ in crypto-currency circles, warned that BTC/USD should not be considered a particular relationship with stocks.
„I think people should not take that meaning of ’safe haven assets‘ too literally … there are always multiple factors that affect the price of an asset,“ he told the network.
„If you imagine Bitcoin as a float and there’s the Titanic sinking next to it, if there’s a rope tying the float to the Titanic, the float will sink with the Titanic; even though the float has buoyancy properties, it’s not capable of holding that kind of load.“
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As reported by Cointelegraph, quantum analysis has suggested that Bitcoin is 95% correlated with the S&P 500.
CZ added, however, that fiat inflation and its impact on investor holdings would eventually increase Bitcoin’s safe haven profile over time.