Bitcoin suffered its biggest weekly decline in US dollar terms last week, ending the week with a huge red candle while the price is now hovering around $78,000. It is evident that investors are currently reducing risk as global uncertainty reaches a peak.
Investors are reducing risks
Investors are currently withdrawing from risky investments as the situation is tense on several fronts.
On a geopolitical level, Donald Trump is challenging the European Union by distancing himself from support for Ukraine and moving closer to Russia. Europe has so far held back, but is planning massive investments in defense in the coming years.
Regardless of personal opinion on the subject, it is creating uncertainty from an investor’s perspective. The consequences of these developments are currently unforeseeable, leading to increased volatility and investors acting more cautiously.
At the same time, the US economy is weakening, which is having a similar effect on the markets. These two factors together are currently causing a weaker phase for Bitcoin – but also for the US tech exchange and other stock markets.
However, it must be said that Europe and especially China have so far held up relatively well in this environment.
Bitcoin back in a decisive zone
According to well-known analyst Kevin Svenson, Bitcoin is facing a decisive phase.
“Bitcoin is back in the critical zone of the weekly parabolic trend. We are still holding on to last week’s lows. No new low has been formed. This is the last chance for Bitcoin to hold an exponentially higher low,” he wrote on
However, most analysts are not yet willing to confirm that we may be in a bear market. “Are we in a bear market now? Quite simply, no. There is not enough consensus to confirm that,” CrypNuevo wrote in a thread on Elon Musk’s X platform.
This week will also be dominated by US inflation data. The Consumer Price Index (CPI) will be released on Wednesday, followed by the Producer Price Index (PPI) on Thursday. This data will be interesting, as inflation in the US has been the biggest problem for the market until recently.
Will we be reminded of this, or will the weaker economy also push inflation further down?
Image by Roy Buri from Pixabay
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