A new week begins and the price of Bitcoin has been facing resistance at $38K all weekend long without ever managing to break it. Nothing alarming at the moment, when you remember that just a week ago the price of Bitcoin was around $33K, and everyone was in panic mode imagining the price of Bitcoin falling below $30K.
That would have been the beginning of a real Bear Market in my opinion, but for the moment the major support at $30K is holding as it did in January 2021 and in June/July 2021.
During the week, the price of Bitcoin had rebounded to $36K and then to $39K for a few minutes in anticipation of Jerome Powell's speech after the FOMC meeting last Wednesday. In the end, the Fed and Jerome Powell did not end the uncertainty with doublespeak that did not satisfy the stock market nor the Bitcoin and cryptocurrency market.
The price of Bitcoin then corrected slightly before returning to around $38K throughout the weekend.
Is the worst already behind us for the price of Bitcoin? Or is it still to come?
Some people are even starting to think that the worst is over for the Bitcoin price and that the bottom was hit last week around $33K. In my opinion, we are not out of the woods yet in the short term. The resistance at $38K has still not been broken, and if it were to be broken, there would still be the more crucial $41.5K resistance for the Bitcoin price to break.
What is happening right now could also be a fake pump that would then cause us a bigger correction as February 2022 is about to start in a few hours.
The Bitcoin price has yet to break the downtrend line of more than two months now that was formed after the ATH in November 2021:
As long as this downtrend line is not broken, the fact that the price of Bitcoin is at $38K or $36K does not change much for the moment. So don't get too excited, the worst is not necessarily over yet for the price of Bitcoin.
The attitude of the Whales or the BTC miners makes me think of an accumulation phase, not a Bear Market that would be imminent
What is important to observe in my opinion is that the Whales are still accumulating BTC, while the reserves on the exchange platforms are still at a 4 year low. Also, BTC miners are maintaining their confidence in Bitcoin for the coming months, as they increase their investment in mining machines while keeping their reserves at very high levels.
This is one of the 8 indicators I look at to see if we are in a Bear Market. At the moment, it suggests to me that we are not. But as always, these indicators can be wrong sometimes. So be careful to keep in mind that this should be used simply to form your own opinion as I do.
For the price of Bitcoin to resume a bullish wave, there needs to be a spark that would revive demand in the spot market. We don't have that yet. The whole narrative around the Fed's change in monetary policy as well as the potential war in Ukraine with Russia possibly invading the step make investors wary and wait and see.
So we may have to wait for more visibility on these issues for retail investors to come back to Bitcoin en masse and for us to have that spark that would allow the price of Bitcoin to break through the upper resistances.
The game theory is in full swing in America with several states now wanting to make Bitcoin legal tender
While the price of Bitcoin continues to move at its own pace, respecting the freedom of investors to act as they wish in such a free market, there are more interesting things to observe on the side of the Bitcoin revolution which is the real signal as I frequently tell you.
Last week, we saw a Republican state senator from Arizona introduce a bill to make Bitcoin an official currency in Arizona. Among the various bills proposed by Wendy Rogers is one that would allow the state government, as well as the governments of any county, city, town, and school district in Arizona, to pay employees in virtual currency if they request it.
Where things get interesting is that very quickly after that, a Senator from Mississippi introduced a bill proposing the same thing for his state. I've been talking about this recently at the countries level with Vladimir Putin's Russia, but this dynamic fits the game theory that is playing out in favor of Bitcoin here.
Every country, state, or city will eventually want to embrace the Bitcoin revolution before the others to be among those who will benefit the most. This will benefit Bitcoin as a whole, and this is where the magic of Satoshi Nakamoto's digital currency comes into its own.
Tesla continues to have faith in Bitcoin, while Google finally seems to be getting more serious about Bitcoin and cryptocurrencies
While the stock market on Wall Street has been volatile since the beginning of 2022, and tech companies have been shaken up several times, we could see that Tesla had continued to HODL Bitcoin no matter what in Q4 2021. Despite the ATH of $69K reached in November 2021, Elon Musk's company continues to have faith in Bitcoin as a cash reserve.
This strategy will be even more relevant in the coming months as inflation continues to be at a very high level in America and around the world.
One last piece of news that has caught my attention in the last few days comes from Google which will be testing Bitcoin and cryptocurrencies in those digital cards used through its Google Pay payment solution. This would be via partnerships with Coinbase, BitPay, and Gemini.
We are not yet at the stage where Google would directly buy Bitcoin and allow its customers to directly spend their Bitcoin via Google Pay. Transactions on Google Pay will still be done in fiat currency. Nevertheless, I find it interesting to see Google take an interest in Bitcoin and cryptocurrencies, as this will allow for greater exposure, promoting usage and adoption in the end.
The president of Google Commerce confirmed to Bloomberg that Google had to evolve by listening to what the market was asking:
“Bitcoin and crypto are something we pay a lot of attention to. As user demand and merchant demand evolves, we’ll evolve with it.”
Now that Google has abandoned its banking ambitions, the Mountain View company seems interested in making some moves into Bitcoin and cryptocurrencies to take advantage of a promising new world. To that end, Google has hired another executive from PayPal, Arnold Goldberg, to head its payments unit, as it seeks to revamp Google Pay.
We'll see where this goes in the coming months, but this is the kind of news I focus on to gauge the progress of the Bitcoin revolution rather than wasting my time frantically watching the Bitcoin price move minute by minute as some do.
A new week is starting and it promises to be an exciting one as always in this universe that never sleeps. So remember to take a step back as often as possible so you don't get caught up in your emotions.
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