Bitcoin is not getting off the front pages of the news, and this time because Microsoft and a New Zealand pension fund used the network, but the markets are moving in a turbulent period as a short-term squeeze is expected.
BTC recovered from yesterday’s losses
This morning, the markets showed signs of life after yesterday’s losses. Yesterday at 16: 00 Coordinated Universal Time, the global cryptocurrency markets reached a low of $ 1.58 trillion, which is the lowest level in almost a month.
But the resistance has held on to this line, and the markets seem to be in a recovery phase. The market capitalization is now creeping up to $ 1.678 trillion.
Global market capitalization is showing signs of recovery. CoinMarketRate
At the time of writing, Bitcoin is back in the green, up 1.10%. According to CoinMarketRate, BTC has fallen to $ 50,856 in the last 24 hours, but is currently at around $ 53,503.
It seems that the markets are happy about two news items. First, Microsoft deployed its decentralized identity network on the main Bitcoin network. The project, launched four years ago, aims to help identify organizations and individuals online without the need for a third party.
The second piece of news was that the New Zealand pension fund KiwiSaver invested 5% of its $ 350 million fund in BTC.
“Our KiwiSaver is mostly built around traditional asset classes-bonds and stocks-but there are times when that may not help. You can still be positive about these asset classes, but other opportunities are opening up,” said James Grigor, the fund’s chief investment officer.
BTC Catalyst – $ 6 billion in contracts
But the recovery of the BTC may be limited by the record number of Bitcoin options contracts that expire today.
The expiration of contracts worth about $ 6 billion, market analysts expect, will lead to a short-term squeeze. While this is likely to lead to higher prices as well, as players making short bets will be forced to buy BTC to cover their losses, it is unlikely to cause a sustained increase.
As Market Watch noted yesterday, markets are entering a frothy period as assets elsewhere divert investment away from BTC. As reported by ByBt, more than $ 2 billion has been liquidated in the Bitcoin futures markets, indicating that the markets are becoming increasingly difficult to navigate.
This concern was also felt on Wall Street. The Dow, S&P 500 and Nasdaq ended yesterday’s session slightly higher, but markets are becoming increasingly uneven as cyclical trading creates a polarizing number of winners and losers.
Tech stocks are struggling to hold on to the gains made at the start of the quarter, while value stocks are leading the way in early 2021.
“We saw value outperforming growth,” Lori Kalvasina, head of capital strategy at RBC Capital Markets, said in a recent note.
But some economists find it difficult to adapt to the pace of change. “It’s hard to keep up with this economy,” Bank of America economists said Thursday. The firm raises its GDP growth forecast to 7.0%, compared with the Federal Reserve’s forecast of 6.5%.
While this is good for the economy and good for consumers, Bitcoin’s incredible growth this year may be stalled. But that hasn’t stopped some from doubling down on their optimistic forecasts.
According to the Deribit exchange, the most common open position on the exchange is an $ 80,000 call, meaning that some expect another Bitcoin boom in April.