Bitcoin is set to wrap up February 2023 with gains of less than 2% (barring a surge later on this final day of the month), and is on course for posting back-to-back monthly gains for the first time since February-March 2022.
However, the world’s largest crypto may have all to do to make it three on the trot.
And here are 3 possible reasons why March 2023 may prove futile for Bitcoin bulls:
Recall how Bitcoin faltered last week, whittling down its month-to-date advance from 10% down to barely 2% at the time of writing.
Markets were jolted into repricing their expectations surrounding incoming Fed rate hikes after being shown further evidence last week of a still-tight US labour market as well as still-stubborn inflationary pressures.
Hence, if the Fed, at its upcoming meeting on March 21-22, does reassert its intentions to send US interest rates to a higher-than-forecasted peak later this summer, that could further sour the mood surrounding risk assets, including cryptos.
Over the past five years, the month of March has seen an average drop of 6.37%.
The only other month that’s averaged a decline in that 2017-2022 window is September (average 9.8% monthly drop over the past 5 years).
If such seasonality proves true once more, Bitcoin would then be further trimming its year-to-date gains which stand at just over 40% at the time of writing.
Besides failing to secure a more convincing gain for February, this month’s advance of under 2% (at the time of writing) also pales in comparison to January 2023’s climb of 38.8%.
As the year-to-date rally shows signs of sputtering, Bitcoin needs all the help it can get to register three consecutive monthly advances.
Furthermore, securing three consecutive months of gains has been a rarity in recent years.
Over the past 5 years, such a feat has only been witnessed over two separate stretches:
Using fund flows as a gauge of investor confidence, note how inflows into exchange-traded products (ETP) that focus on cryptos were surging at the start of the year, coinciding with Bitcoin’s stellar start to 2023.
However, such inflows have morphed into outflows in recent weeks, as shown in the chart below.
While the latest fund flows data suggest that the bleeding could be easing, investors may want clearer signs before ploughing their funds back into this asset class.
Still, Bitcoin bulls may yet hold out hope, provided crucial support lines can hold:
The hope among aficionados is that Bitcoin is merely biding its time before lurching higher and finally overcoming the $25k hurdle, having fallen just shy of the mark in recent weeks.
The $25k mark is also a notable resistance line, having previously repelled prices back in August 2022 as well.
Those wishing that Bitcoin can sustain its uptrend will be hoping that its positive correlation with US tech stocks can decouple.
And to be fair, there have been sessions when crypto marches to the beat of its own drum.
However, seeing as that positive correlation between the Nasdaq 100 index and Bitcoin has remain unperturbed over the past 3 years, it suggests that …
broader market sentiment is likely to have a major say on how Bitcoin fares in March 2023, and beyond.
The world’s largest digital coin is holding up relatively well, despite the latest salvos against the crypto world.
28 March 12:10
The world’s largest crypto by market cap is taking a healthy pause after briefly breaching the $28,000 mark, though still holding around its highest levels since June 2022. Bitcoin’s year-to-date gains soared by as much as 72% before paring such advances to 67% at the time of writing.
21 March 10:55
Amid the ongoing SVB saga and the fears engulfing the traditional US financial system, Bitcoin is advancing for a fourth consecutive day, surging past its 50-day simple moving average (SMA) to come within touching distance of the psychologically-important $25k line.
14 March 11:19
At the time of writing, the value of the world’s largest crypto has fallen by about 2.9% so far this month. Bitcoin is now limping along, barely keeping its head above the psychologically-important $22,000 mark for the time being.
7 March 09:54
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