Bitcoin Poised For Bumpy Week; Here’s why

The week that has just unfolded is set to be packed. Major Wall Street companies are due to disclose their earnings for the quarter ended in June. In addition, potential interest rate hike announcements and other macro data set releases are also expected to be officially unveiled. The result is that Bitcoin is predisposed to tread a slippery slope over the next few days.

Not so optimistic expectations

Google and Microsoft will release their Q2 report tomorrow. And on Wednesday and Thursday, Meta and Apple follow.

According to expert analyses, most companies are expected to make a decline. Let’s take Meta, for example. A recent report suggested that the market expects Meta Platforms to deliver a year-over-year decline in revenue on lower revenue when it reports its results.

Read more: Meta may not be off to a good start, but can Metaverse save it?

When Q4 2021 results were revealed in February this year, Meta’s share price fell 26% in a single day. But when Q1 earnings were released in late April, hardly any damage was done, as META traded in the green after beating analysts’ DAA expectations. It is worth noting. Nevertheless, the company had recorded its slowest revenue growth in a decade and the losses incurred by its metaverse arm had contributed significantly to the same.

Read more: Did Metaverse Just Go Meta? Reality Labs reports $2.9 billion in losses

So, this time too, even though earnings numbers are expected to decline, investors will carefully consider other growth-related factors before buying/selling the earnings news.

Macro correlation

Bitcoin and the S&P 500 have shared an on-and-off relationship on the macro frame. Lately, their mutual dependence had marked a free fall. However, a significant improvement has been registered in recent days. Per data from Skew, from July 18’s 28.2%, the BTC-S&P 500 realized correlation has climbed to 36.6%. This means that the markets have started to adjust their biased directions.

In fact, in macro-uncertain times, there has rarely been an instance where the S&P 500 and Bitcoin have not moved in sync. And during this week, said narrative will probably gain more momentum.

It is interesting to note that BTC-S&P 500 realized volatility has fallen from 65% to 26% over the past fortnight. This means that volatility in the Bitcoin market has withered compared to the SPX. Thus, the stock market can be expected to crash this week, and Bitcoin can be expected to follow suit.

The FOMC factor is also set to influence market performance. The monetary policy body’s interest rate announcement comes on Wednesday. The Chicago Mercantile Exchange, for its part, expects rates to either increase by 75 bps (78%) or 100 bps (21%).

However, the market may not necessarily react negatively because it has seen several such rallies in recent months. A recent report noted,

“With large increases an established norm among policy makers globally, 75 bp no longer feels so important.”

Here it is worth recalling that Bitcoin fell to $19,000 upon the release of inflation data at the beginning of this month, but quickly rebounded. So the market may expect an initial shock wave on the macro announcement this time, but the same may not necessarily be able to break the bullish outlook in the medium term.

Read more: US inflation rises to 9.1%, Bitcoin falls

Bitcoin price

As highlighted in a recent article, Bitcoin’s path to $28.2k remains precise. However, if all events turn negative and induce a pessimistic sentiment, the king coin can be expected to slide down.

Bitcoin faces fairly stiff resistance in a range extending from $22.5k to $23.2k. Here, over 793k addresses have bought a total of 764k BTC. So, even if Bitcoin manages to push higher over the next few trading sessions, it has a high chance of being hindered in the aforementioned area.

Bears were already gaining control on the short time frame charts and Bitcoin had slipped below its 50 day MA in 4 hours. If it is not saved by the 100/200 day MAs, it will likely drop to $20.8k. If macro factors play spoilsport, the doors to $19k and $17.6k later will open.

On the flip side, if HODLers don’t panic, the $28k target will still hold water and BTC can be expected to achieve the same post and clear the $22.5k – $23.2k barrier.

Read more: Bitcoin has a clear path to $28,200; Here’s why