The last two months have seen the cryptocurrency of Bitcoin ascending a slightly improved trend, where it kept bouncing multiple times. While it could sound positive, the performance of the cryptocurrency over the year does remain lackluster -14%. On the other side of the coin, the Bloomberg Commodity Index did manage to gain around 2% at the same period of time.
This commodity index benefitted heavily from the increase in prices of crude oil, gold, natural gas, and lean hogs. Worsening conditions of macroeconomics also pressured the supply curve- which then transformed the price of the equilibrium towards a far higher level.
Bitcoin Price Might Be Affected Heavily By Inflation
Also, the United States went ahead and approved a spending bill of $1.5 trillion on the 15th of March that would see the government receiving its funds through September. The signing of the bill by the President does avert a shutdown of the government but also pressures the national debt of the United States of America, which currently sits at $30.3 trillion. Still, most of the traders of Bitcoin and other cryptocurrencies have been pretty concerned about the rate hikes which could be imposed by the US Federal Reserve throughout the year- in order to contain most of the inflationary pressure.
The price recovery of Bitcoin over the price range of $40,000 on the 26th of March did take most of the market bears by surprise as only 7% of the bearish option bets for the 18th of Match were to be placed above such a price level. Most market bulls could have been fooled by the recent price resistance test of $45,000 on March 1 as their bets for March 18’s options expiry of $760 million- which would lead the price all the way to $65,000.
It also needs to be understood that the bears of Bitcoin need to see to it that the price of the cryptocurrency was below $40,000 on the 18th of March to avoid a loss of $105 million. On the other hand, the best-case scenario of bulls does require a push above $41,000 to increase their gains to $160 million.