Bitcoin (BTC) is feeling the pressure as it begins a new trading week, but what will drive market sentiment in the days ahead?
The Cointelegraph newsletter tells you about five factors that will influence the price of Bitcoin in the week just beginning.
Community donates 0.7 BTC to phishing victim who lost all his savings at Bitcoin
Actions plummet due to fears of the second wave of COVID-19
Stock market futures are taking a beating before the opening bell. The likely culprit is the coronavirus once again, as a new cluster of infections in China has raised fears that a second wave is already beginning.
Dow Jones futures lost 800 points, or 3.2%, on the day, while the S&P 500 and Nasdaq fell 3% and 2.3% respectively.
Bitcoin has managed to reduce the degree to which its price is affected by macro changes, but as Cointelegraph pointed out on Monday, there is still some exposure.
More losses are likely to spread selling pressure in an already fragile BTC/USD. Last week, an analyst sounded the alarm about a stock market crash event that would occur in the next three weeks.
Bitcoin’s per-transaction fee drops to less than $1, returning to April levels
Bitcoin vs. S&P 500 1-year chart
Bitcoin graph vs. S&P 500 at one year. Source: Skew
Exchange entries soar after Bitcoin price drop
A side effect of Bitcoin going below $9,000 for the first time in two weeks is a concern for exchanges.
According to data from the CryptoQuant chain analysis resource, the inflows into the large exchanges increased on Monday.
„Inflows to the exchanges have risen steadily in the last few hours and the Bitcoin Future is down 5%. Stay alert,“ the company advised on Twitter along with a chart that follows the phenomenon.
A record number of investors own at least 0.1 BTC
Exchange inflows 3-month chart showing latest spike
Chart of 3 months‘ foreign exchange inflows showing the latest peak. Source: CQ.Live
Traders who move currencies to exchanges may signal a desire to sell or a willingness to sell the currencies in the event of further losses. Previously, exchange reserves reached their lowest levels since the end of the Bitcoin bear market in December 2018.