Bitcoin closed last week in positive territory, gaining 1.6% and closing at $42,100. The global crypto market cap fell by 1.5% to $1.96 trillion. The bitcoin dominance index increased by 1% to 40.7%, as major altcoins lost ground.
At the time of writing, BTC was trading at $42,200. According to CoinGecko, bitcoin's market capitalization is at $800 billion.
Last week, the world's leading cryptocurrency jumped to the highest level since January, surpassing $45,800. However, BTC retreated on Friday on recent US CPI data, as inflation in the US reached a 40-year high. Major US stock indexes declined as well, pushing bitcoin down and showing the increased correlation between equities and digital assets.
At the end of last week, the Federal Reserve announced an extraordinary meeting of the FOMC would take place on February 14. The Fed could agree on hiking interest rates during this meeting and not in March, analysts say. This could be detrimental to all risk assets, including cryptocurrencies.
According to crypto analyst Nicholas Merten, BTC is not in a bearish trend, despite its current sideways consolidation. Bitcoin is undergoing an accumulation phase, indicating that bulls are in the lead, he says.
Merten sees a crypto rally coming soon which could propel BTC above $200,000 by the end of 2022. The cryptocurrency's market cap could reach $4 trillion.
Short-term outlooks for BTC are mixed - BTC could either go up, climbing above $46,000, or fall back to $40,000.
Currently, the asset's key resistance level is at $45,500. Bearish traders are pushing BTC down toward $40,000. However, they are currently on the sidelines as correlation between crypto and stock markets remains high.
The aftermath of the Fed meeting and escalating tensions in Eastern Europe are likely to lead to increased volatility in the crypto market by the end of the week.
