Bitcoin Returns Below $45,000. Recovery Still Very Likely
Bullish Fundamentals: MicroStrategy Buys More Than 4,000 BTC, Shopify and Strike Partner Up
The recent break of $45,000 resistance resulted in a quick climb into the next resistance level and a new yearly high at $48,234. However, the push was neutralized and Bitcoin failed to consolidate above $45,000, currently trading at $43,500.
The drop was likely caused by the prospect of a more hawkish Fed and an accelerated pace of interest rate hikes. But while the rate hikes can temporarily hinder the advance of risky assets, Bitcoin can benefit from a few bullish signs coming from major players on the scene.
Earlier in the week, MicroStrategy bought 4,167 BTC, worth roughly $190.5 million. The buying price was $45,714 and the purchase puts MicroStrategy’s holdings at 129,218 BTC, which is roughly $5.6 billion at the current price. CEO Michael Saylor mentioned on a number of occasions that MicroStrategy has no plans to sell the digital asset.
Another possible Bitcoin catalyst comes in the form of a high-profile partnership: cryptocurrency payment app Strike & e-commerce platform Shopify. During the 2022 Bitcoin Conference held in Miami this week, Strike’s CEO Jack Mallers announced that the app will be integrated into Shopify’s platform to allow Bitcoin payments via the Lightning Network.
Mallers said: “We’re proud to partner with Shopify to provide merchants with a cheaper and faster way to accept U.S. dollars using Bitcoin technology”. He added: “The Lightning Network is a global payments network that lowers costs, enhances speed, drives innovation, improves financial inclusion, and brings the power of choice to consumers and merchants”.
According to a statement from the two companies, the partnership will allow merchants to “save costs on processing fees, with cash-final settlement”, which is another big step towards mass adoption, considering that Shopify is present in 175 countries and its sellers run more than 1 million businesses.
Chart Analysis – BTC/USD
The bullish break of the $45,000 key level seemed to open the door for further upside movement but Bitcoin failed to surpass the resistance at $47,000. The pullback was created by a hawkish Fed but also by the position of the RSI, which at the time was just touching its overbought level.
Under different circumstances, Bitcoin would manage to push higher despite factors like the ones that I’ve just mentioned, which shows that currently, it lacks strength. This increases the probability of a drop into the 50-day Moving Average and possibly into the bullish trend line seen on the chart below. If the pair descends into the $40,000 support zone, the probability of a new rally will increase.
