Bitcoin continues to move sideways as the week goes on. The benchmark cryptocurrency was pushed back from $40,000 levels and has been unable to bounce back to previous highs. However, BTC has shown resilience as the traditional market appears to be on a declining trend.
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At the time of writing, Bitcoin is trading at $38,830 with a gain of 2% in the past week.
BTC is moving sideways on the 4-hour chart. Source: BTCUSD trading summary
The traditional market faces major hurdles due to increasing uncertainty on two fronts: the conflict between Russia and Ukraine and the potential rate hike by the US Federal Reserve (FED).
As a result, the Chinese stock market has suffered major losses in the past week. As one pseudonym analyst noted, mainland Chinese stocks saw a 3% loss yesterday alone. The situation is beginning to resemble the economic crisis of 2008.
Hang Seng down almost 5% just 5 minutes after the session. The mainland fell almost 3%. This came out yesterday, the worst China session since ’08. When do you call it a crisis?
— TheLastBearStanding (@TheLastBearSta1) March 15, 2022
The US stock market, as represented by the S&P 500, has also suffered losses and has been on a downward trend since early 2022.
During this period, Amazon recorded a loss of 15%, as did Apple, Microsoft a loss of 18%, Tesla a loss of 27%. These are just a few, but some of the strongest companies in the field of traditional finance.
Meanwhile, Bitcoin has shown relative strength. Yes, it has moved sideways but has maintained its current levels despite the bearish price action in the stock market.
Bitcoin and stocks moved together and operated as correlated assets. This is one of the stories of this current cycle, but it seems to be losing momentum as the price of BTC continues to defend its ground.
Bitcoin is slowly moving up, even while traditional safe havens are declining in a short space of time. Gold has lost nearly 2% of its value during today’s trading session, soon after rallying north of USD 2,040.
Squeezing shorts, more profit in sight?
Data from Wu Blockchain shows that a number of high-value players are borrowing money from crypto exchange platform Bitfinex. These players used their money to open unprotected short positions.
Since March 10, more than 5,000 BTC have been used to take out loans and open shorts. However, in the past 12 hours, the positions have gone down.
According to datamish data, BTC borrowed on Bitfinex is being returned and BTC borrowed by short sellers has fallen to 2,481, down 49.5% in the past 24 hours. pic.twitter.com/fB4hSYO7nn
— Wu Blockchain (@WuBlockchain) March 15, 2022
Maybe these unprotected shorts were in another crypto exchange for a long time, maybe they closed their shorts when they noticed BTC’s price action at the current price.
In this current scenario, driven by fears over the war in Ukraine and more inflationary expansion, Bitcoin has seen an increase in the number of addresses with balances above $1,000.
BTC wallet addresses are getting bigger on the daily chart. Source: TonyTradesBTC via Telegram
More people seem to be using BTC to potentially hedge against the effects of a protracted conflict in Europe, to easily transport wealth between borders, to secure everyday items when banks collapsed.
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These dangers are becoming a reality in some parts of the world, sending a warning to anyone who is paying attention. The need for BTC has never been more real.