Bitcoin (BTC) has found some buyers after the recent selling stalled below the $50,000 level. The coin now trades at $52,000 (£34,000, €39,000), and the bounce above that psychological figure has pulled the rest of the cryptocurrency market higher.
In the economic calendar, the US and Eurozone will release their first estimates of Q1 GDP, and the US Federal Reserve will be announcing monetary policy.
All aboard the bitcoin bounce
Bitcoin has shrugged off the recent selling with a bounce above the $50,000 mark, and this is pulling the cryptocurrency market with some altcoins seeing double-digit returns on Monday.
The dump in BTC was obviously driven by some large investors bailing out after the coin failed to hold record highs above the $60,000 level. The selling was driven by some rumours of imminent lawsuits in the US regarding investment institutions laundering money in BTC, while other regulatory issues swirled with Turkey banning crypto payments.
Another reason cited for the sell-off was a blackout in China, where a failed power plant in Western China shut out some Bitcoin miners, with the “hashrate” falling by almost 50%.
The latest bounce will attract some value hunters, and the week ahead will determine whether the uptrend can remain, or a deeper correction emerges.
The Fed takes the stage amid big earnings week
The Federal Reserve will announce interest rates on Wednesday which will undoubtedly see the US lending rate remaining at 0.25%. A surprise shift towards winding down stimulus in Canada may see pressure on the Fed to telegraph their own plans for tapering after recent growth and inflation figures picking up in the United States.
A big earnings season sees Apple and Facebook reporting, with Microsoft, Alphabet and Amazon also taking the stage. As of Friday 23 April, only 25% of S&P 500 companies had reported, and Netflix (NFLX) was the big story as subscriber shortfall rattled investors.
At this point, three quarters of S&P 500 companies have beaten earnings and revenue forecasts. Corporate profits are expected to be higher by around 34% for the first quarter, according to Refinitiv.