The price of bitcoin (BTC) has been very bullish since May 27th. Weekends, especially holiday weekends, are volatile and unpredictable, with large price movements. Even in bull markets, bearish price action is often the norm, but BTC has deviated from this trend.
Bitcoin grew nearly 11% between May 27 and May 30, breaking through the critical $ 28,600 level to climb above $ 30,000 to $ 31,700. The weekly close was the highest in twenty days and brought the strongest three-day advance in the past two months. However, any additional potential may be offset by macro fear.
Rising commodity prices raise fears of global food shortages
Global food supply is a primary factor, but it cannot be easily overlooked which contributes to the future price potential of bitcoin. Since the beginning of the COV-19 pandemic, governments around the world have closed their ports and airports, disrupting and disrupting the flow of goods. It will take years for this turmoil to return to normal, but that is not the main cause for concern.
In the United States, the cost of fertilizer has increased exponentially over the past 18 months. In January 2021, the fertilizer price index was $ 78.83 and currently stands at $ 254.97, an increase of almost + 225%. A combination of supply chain disruption and ongoing shortages is likely to disrupt this market.
Individual commodity prices continue to rise and are one of the main factors behind the steady rise in inflation. In particular, wheat (CBOT: ZW) reached new full – time highs in February 2022 and remains close to those highs. In 2022 alone, wheat futures are up 76% and over 143% in the last 18 months.
Oil futures (NYMEX: CL) continue to rise and are now trading at levels not seen since July 2008. Traders and investors fear that oil will hit $ 150 a barrel when China ends the shutdown of COVID. When this happens, demand is bound to return and have an additional impact on oil.
Concerns about stock market growth
Stock markets around the world continue to come under significant pressure. Rising inflation, rising commodity costs, supply chain disruption and the conflict in Ukraine put investors and traders at risk of protection.
A number of high-impact economic events are expected this week, which should stop any major price movement in stocks and cryptocurrencies. The release of unemployment data from the European Union comes on June 1, accompanied by an interest rate decision and Bank of Japan manufacturing data. In addition, U.S. non-farm unemployment and payroll figures will be released on June 3rd.
To add to a busy week, June 3, three U.S. Federal Reserve officials will also be speaking: John Williams and James Bullard will speak on June 1, Lael Brainard on June 3.
Technical Levels May Limit Bitcoin Recovery to $ 37,000
Bitcoin is emerging from a new high of nine consecutive weekly losses. Since the inception of the current weekly candle, buyers have returned and pushed BTC above the full trading range over the past two weeks and well above the 50% range of the flash crash on the weekly candle from 9 May , 2022.
If the price of bitcoin can close above the daily Kijun-Sen at or above $ 31,350, then BTC has a very open path to reach the $ 37,000 value zone. In addition, the 2022 volume profile is very narrow, between $ 32,000 and $ 37,000. But the bulls could face the sellers again at $ 37,000.
If the bulls want to send the message to the market that a new upgrade is about to begin, they will have to push the price of bitcoin to a daily close near $ 44,000. In this case, BTC would initiate an “Ichimoku bullish ideal breakout,” giving the beneficiaries the path needed to test the highest level ever.
As stock prices remain in the territory of the carrier market and commodities remain at an all – time high, a temporary reversal is unlikely to occur. If the proverb in technical analysis, “before volume before price,” is true again, traders should watch food and oil commodities sell as stocks and bitcoin increase.
The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investments and trades involve risk. You should do your own research before making a decision.