Bitcoin (BTC) opened the Wall Street trading session with a spike to over $41,500 on March 21 as last week’s late gains endured.
McGlone: Fed is saying “Don’t buy the dip”
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD advancing $500 into the Wall Street open to see a strong start after its best weekly close in four weeks, but progress was short-lived.
Amid a buoyant stock market, the largest cryptocurrency showed mixed signs on the lowest timeframes as traders waited to see how long the current trajectory could sustain.
For popular trader Crypto Ed, the area around $41,500 was essential as a potential pivot point — a bounce and continuation could occur, providing an opportunity for longs, but a rout would mean a trip below $40,000 support.
In his latest YouTube update, he identified $37,000 as a potential bearish target.
Analyzing the four-hour chart, meanwhile, trader Pierre called the $40,800–$41,200 zone a “must hold.”
“LTF pivot today imo (break it, teleport to 42.0-42.5k),” he concluded in the latest entry in a dedicated Twitter thread about spot price action.
Addressing the wider macro picture, meanwhile, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, had some concerning news for those hoping that the stock market revival would last much longer.
“So, we have the most extended stock market in 20 years relatively... most expensive stock market in terms of GDP in the history of mankind, most expensive stock market versus real estate and versus global equities ever... and part of that is that’s been driving inflation and the Fed has to push back that inflation,” he told the Wolf of All Streets Podcast Monday.
“So, to me, that’s the key puzzle point this year; that if it doesn’t get filled in — i.e., the stock market dropping about one third — then that’s going to be an issue.”
As such, bets were in place already for a significant equities correction, with Bitcoin’s positive correlation making losses for hodlers a major liability.
Continuing, McGlone pointed to hints by United States Federal Reserve Chair Jerome Powell that more aggressive interest rate hikes to tame inflation could come at further meetings of the Federal Open Market Committee.
“That was my warning — people that don’t get it yet — ‘Don't buy the dip’ — that’s for the people that haven’t learned their lessons,” he said.
On Bitcoin specifically, he gave a target of $100,000 years out, but that the market “might easily see $30,000 first.”
Germany lays bare inflation dangers
More macro news that was difficult to swallow came from Europe prior to the Wall Street opening bell.
Related: ‘No more 4-year cycles’ — 5 things to know in Bitcoin this week
Despite a recovery in European equities versus the month of war between Russia and Ukraine, inflation figures showed the extent of the headache unfolding for policymakers.
On the radar of market commentator Holger Zschaepitz Monday was Germany’s producer price index (PPI).
“German PPI jumps 25.9% YoY in Feb. This was the highest increase ever since the start of the stats in 1949. PPI ex-energy rose 12.4% YoY,” he warned.
Like BTC, classic safe-haven gold, meanwhile, was also biding its time looking for direction, making up ground lost in its downhill candle on Friday and trading at around $1,934 at the time of writing.
On altcoins, flat performance dictated the mood, with none of the top 10 cryptocurrencies by market capitalization advancing by more than 5% on the day.