MicroStrategy failed to warm up the market

Bitcoin was down 1%
on Tuesday, ending the day at around $45.8K. In low-liquid trading at the start
of the day on Wednesday, the first cryptocurrency was losing more than 3.5%,
briefly dropping to $44.4K, now stabilizing 1k higher.

From the levels
exactly a day ago, Ethereum lost 4.4%, among other altcoins, the decline
prevails, with the exception of a few big names. Terra adds 0.6%, staying close
to its highs. Dogecoin is up 7.5%.

The total
capitalization of the crypto market, according to CoinMarketCap, sank by 3.6%
over the day, to $2.09 trillion. The Bitcoin Dominance Index rose 0.2% to
41.2%. The cryptocurrency index of fear and greed by Wednesday morning lost 5
points to 48 while remaining in a neutral state.

Bitcoin has continued
to correct on Tuesday amid a decline in US stock indices. Judging by the market
dynamics on Wednesday morning, we saw the triggering of algorithmic stop
orders, which quickly sent the price down. However, very soon market
participants returned to cautious purchases.

Since the beginning
of the month, the bulls have clearly not been able to develop an offensive, and
we see the predominance of selling on growth towards $47,000. On the other
hand, support around the $44,000 level is still in place.

Software developer
MicroStrategy bought 4,167 bitcoins on credit for $190 million. The company
currently owns 129.2 thousand BTC worth almost $4 billion. last days. The fact
that even such a large buyer failed to warm up the market makes us look to the
near future with caution.

Bloomberg believes
that a rally in the current environment is unlikely. The market is entering a
bearish phase similar to that of the spring of 2019. Galaxy Digital CEO Mike
Novogratz also believes that BTC will be under pressure from the US Federal
Reserve to raise rates this year.

Today, US Treasury
Secretary Janet Yellen will make her first speech on cryptocurrencies. Her
presentation will focus on regulation and investor protection. Yellen has
previously criticized digital currencies for their anonymous nature of
transactions.

The US government has
previously indicated that it wants to see cryptocurrencies private but not
anonymous. This is similar to the current principles of the banking system,
where the government knows the owners and has the ability by law to seize or
restrict access to assets, but these data are generally not disclosed publicly.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.