For almost a month, there has been uncertainty in the cryptocurrency market due to fundamental factors. The armed conflict in Ukraine provoked geopolitical tensions, thus forcing investors to urgently move their capital to save it. The aggravated situation in the world made the outcome of the Fed meeting in mid-March even more unpredictable.
As a result, stock markets and the cryptocurrency market found themselves in a situation where geopolitical and macroeconomic factors interfere with systematic and strategic investment. In this regard, investors began to buy gold.
However, time has passed and the situation has somewhat changed. There is a jump in BTC outflows from crypto trading platforms, and the total volume has reached the lowest level in three years. On-chain analysis of individual cryptocurrencies is also pointing to upside momentum, while high-risk assets like SPX and NASDAQ are showing signs of recovery. All these facts indicate that the stage of uncertainty is nearing its end.
Chamath Palihapitiya, the founder of venture capital fund Social Capital, is of the same opinion. The investor believes that markets respond to bad or good news in the same way but can hardly endure periods of uncertainty. According to the entrepreneur, it was the period of instability and vague prospects that contributed to the growth of gold and a flight from the main financial instruments.
Indeed, renewed investment in stock indices indicates that the situation is gradually returning to normal. As for the outcome of the Fed meeting, investors received a signal from the department about liberal tactics to tighten monetary policy. In addition to the fact that the markets responded positively to an increase in the key interest rate by 25 points, investors received the understanding of the Fed's further steps. This allows them to plan investment flows in accordance with the new strict rules for access to liquidity.
Speaking of the armed conflict in Ukraine, the key moment for investors was the day when negotiations between the Ukrainian and Russian diplomats began. This is a sign indicating the desire to find a compromise. For major market players, this is another point of support while planning investments. Given the renewed investment and the adaptation of markets to the new reality, one should expect increased buying activity.
According to the daily trading chart, bitcoin bulls have made first attempts to push the price up. Thus, the asset has come close to $42,200 and is currently testing the level of $44,000. Technical indicators also point to stable buying activity, with the stochastic oscillator remaining in the overbought area at around 80 and the RSI indicator moving around 60. This suggests an increase in the volume of long positions. Therefore, bitcoin has every chance of retesting the level of $45,600. However, judging by the small size of candlesticks, the asset is expected to approach this mark gradually rather than impulsively.
