Last week, Bitcoin lost around 2% of its value and now sits below $42,000. The trading volume has fallen again and currently stands at $16 billion per day. Meanwhile, altcoins fell even more. This can be judged by the Bitcoin dominance, which has grown from 42% to 43.5% over the week.
During this time, there were quite a few crypto events that attracted public attention. One of them was the arrest of a married couple accused of hacking the Bitfinex exchange in 2016. As a result of the fraud, 120 thousand Bitcoins worth $75 million at that time were withdrawn from the exchange. As of today, this amount would be equivalent to $3.6 billion.
The US government gained access to the stolen funds and seized them. Against this background, the Bitfinex exchange token, Unus Sed Leo, grew by 120% per day and joined the top-25 cryptocurrencies by capitalization. Also, this story caught the attention of the film community: Netflix announced that it is going to shoot a documentary series about the accused couple.
Another big news comes from Binance. The world’s largest crypto exchange acquired a 30% stake in Forbes media holding for $200 million. Thus, Binance will become one of the two largest company’s shareholders. The purchase was made as part of the SPAC deal, via which Forbes will issue its shares and start trading them on the NYSE. An interesting fact is that Forbes often spoke about Binance and its activities in a negative way, and refused to include CZ in the list of the world’s richest people.
However, the abovementioned investment was not the biggest one that was announced this week. Thus, the Polygon team reported that it has raised $450 million to develop its own solutions and implement WEB 3.0 projects. This round was led by Sequoia Capital. In total, more than 40 venture investors and companies took part.
Another record was set in the NFT industry. The Chain CEO purchased NFT CryptoPunk #5822 for 8,000 ETH. At that time, it was worth $23.7 million so it turned out to be the most valuable NFT purchase. In addition, another unknown person bought CryptoPunk for 2,501 ETH, or $7.8 million.
All this contributed to the positive market sentiment. As a result, the price of Bitcoin even exceeded $45,000. Let’s take a look at the chart and try to figure out which direction the market will go this week:
Last week, Bitcoin hit a local maximum of $44,000 – $46,000. The price has stagnated around this level for most of the week. Buyers managed to break the $45,000 mark twice, but failed to gain a foothold above it.
In addition, we have important resistance and support levels around there. On the daily chart, here also comes the neck line of the head and shoulders pattern. For now, Bitcoin has tested this level and rolled back down by 5%. This adds some uncertainty to the current state of the chart.
Moreover, this week ended very badly for Bitcoin. The weekly chart shows a strong reversal candle, which has a long upper shadow and a small body. In our case, this may indicate an upcoming price drop.
There is still uncertainty reigning over the market right now. Many market participants have switched it off and feel quite reluctant to buy any cryptocurrencies, which can be clearly seen on weekends when the price volatility is rather low. The situation like this still speaks in favor of bears. If our scenario turns out to be correct, then the fall of Bitcoin will lead to the drastic fall of all other cryptocurrencies.
An extraordinary meeting of the FED is expected today. This event may become the main trigger for the price recovery this week. If the results of the meeting are negative, then we will most likely see a large-scale decline again, not only in the crypto market, but also in stocks.