Bitcoin Price Prediction this Week: China’s New Economic Decisions Fueling the Market

    Pathik Bhattacharya
    Pathik Bhattacharya
    Published on March 06, 2023 10:23 AM

    Bitcoin has seen many price upsides downs and table turns within this week. Today we will do a deeper dig into every event that has happened since the last week which has affected BTC's Price follow-up.

    Bitcoin price prediction for the week
    Source: Unsplash

    Bitcoin has been drawing flats since the previous week. The halt came after a long bull run from February and is now compensated with a downfall. Many experts’ Bitcoin price prediction has gone wrong after the news of the Silvergate (Sl) fiasco came to the surface.

    A lot of sheer prices and high fluctuations made Bitcoin price prediction a bit translucent. The launch of new Bitcoin ordinal NFTs by YuGa Labs which is the parent company of the famous NFT Bored Ape Yacht Club (BAYC), boosted the price of Bitcoin steadily. 

    Let’s have a look at what events happened this week and how they impacted Bitcoin price prediction.

    Bitcoin Ordinal NFT Launch by YuGa Labs

    Yuga Labs has revealed plans to launch an NFT collection based on the Bitcoin-based Ordinals protocol (Bitcoin ordinals ), which has gathered traction since its launch last month. The TwelveFold collection will have 300 generative art NFTs created by Yuga Labs and arranged on a 12x12 grid as "a visual parallel for the geography of data on the Bitcoin blockchain." Yuga Labs announced that it will have both 3D and hand-drawn elements.

    How it affected the Bitcoin price prediction?

    Glassnode highlighted in a Feb. 13 report that for the first time in Bitcoin's 14-year existence, a percentage of network activity is being used for reasons other than peer-to-peer monetary Bitcoin (BTC) transfers:

    According to Glassnode, the spike in Ordinals has led to a "short-term uptick in Bitcoin network utilization of late," bringing many "new active users" with non-zero BTC balances to the network.


    bitcoin addresses with non zero balance

    Source: Glassnode

    On the same day, the price climbed up to $24,859 almost touching the $25K mark but the next day a bearish market affected the price surge. The RSI was also spiked up to the overbought zone and hence the next move was a sure shot that the prices will come down which made the Bitcoin price prediction obviously correct.


    Bitcoin Chart after Bitcoin ordinals released by yuga labs

    Source: TradingView

    Some prominent "Bitcoiners," like Blockstream CEO Adam Back, has lately expressed dissatisfaction with the Ordinals protocol, claiming that it deviates from Bitcoin's original goal as a peer-to-peer electronic payment system.

    Some, on the other hand, have been more amenable to the notion. Ordinals, according to Bitcoin bull Dan Held, will introduce additional "financial use cases to Bitcoin."

    Silvergate Crypto Collapse Took Bitcoin Down

    In the next story, Bitcoin’s upward moment got stuck by the new Silvergate crypto collapse as Coinbase and many other firms discontinued the services offered by the universal payments Bank Silvergate (Sl).

    Silvergate Bank announced on Friday the closure of its cryptocurrency payments network, the Silvergate Exchange Network (SEN). According to a message on the website of the crypto-focused bank.

    SEN is Silvergate's proprietary network that allows the bank's institutional investor and digital currency clients to move US dollars 24 hours a day, seven days a week between their Silvergate accounts and the accounts of other Silvergate clients.

    With the collapse of the crypto exchange FTX, concerns about Silvergate's financial health and future prospects grew. According to the bank, FTX represents less than 10% of its total deposits from all digital asset clients as of September 20, 2022.

    As the news came in it hampered the Bitcoin price prediction severely. The progress of Bitcoin which many experts were speculating would break the 25K resistance is now hanging between the $22K-$23K mark.

    The signals of the downfall were seen before 01 March as the 50-Days and 100-Days SMA bisected each other. The plunge was seen after two days when the bank confirmed its discontinuation of crypto payments. 


    Bitcoin chart after silvergate collapse

    Source: TradingView

    The RSI could be seen in the oversold region which in fact took the whole market down.

    At the same time, Marathon Digital Holdings (MARA) sold out all the Bitcoin it mined in that month (i.e 1500 BTCs in February). The selling pressure made the sentiments bearish and hence the market fell.

    Also Read: Bitcoin Price Prediction-BTC falls to two-week low amid Silvergate Ambiguity

    China’s New Economic Decisions Fueling the Market

    China has banned any transactions and trading which deal with cryptocurrencies in 2021. China’s crypto breakdown is what affected the late bull run of crypto market. However, according to a report by South china morning Post, Mainland China remains East Asia’s largest cryptocurrency market in terms of transaction turnover and ranked fourth worldwide.

    The Chinese market still affects the crypto market severely. Economic statistics from a reopened China, which quickly lifted all Covid restrictions at the start of the year, might strengthen the "China narrative" that spurred the small Bitcoin price spike in late February. The country's economic statistics will be released this week, including the Balance of Trade, foreign currency reserves, and inflation rate data.

    In Short,

    • China expects its economy to grow by around 5% this year, higher than the 3% growth predicted in 2022 due to the impact of Covid-19.

    • The nation aims to maintain inflation at 3% this year and create 12 million new urban jobs.

    • Premier Li Keqiang announced this at the start of the National People's Congress session and submitted his last government work report.

    • China achieved its primary goals and objectives for the year and sustained stable economic performance despite a complicated and ever-changing environment.

    • Premier Li Keqiang attributed these achievements to China's excellent economic resiliency.

    • China's defence budget will increase by 7.2 per cent in 2023, marking the ninth consecutive year of single-digit percentage growth.

    Since the news came, the price has been neutral. The significant drop after the Silvergate news is now compensated by the positive news. The graph could be seen as flat but a bit of price jumps could be seen which shows that the BTC has tested the resistance many times and can break it at any moment. 

    Bitcoin Chart after china economic reopen

    Source: TradingView

    Bitcoin Price Prediction in a Nutshell:

    • Yuga Labs launched an NFT collection based on the Ordinals protocol, leading to a short-term uptick in Bitcoin network utilization and bringing new users, but some Bitcoiners are unhappy with the protocol.

    • Silvergate Bank's closure of the cryptocurrency payments network severely hampered Bitcoin's progress, leading to a significant price drop. Marathon Digital Holdings' selling pressure also worsened sentiments and the market.

    • China's new economic decisions may strengthen the "China narrative" that led to a small Bitcoin price spike in late February. The upcoming release of China's economic statistics might affect the crypto market.

    Bitcoin weekly event chart

    Source: TradingView

    In conclusion, the events covered in the article had a mixed influence on Bitcoin's price forecast, with some events resulting in short-term increases in network use and others resulting in major price reductions. Overall market mood is gloomy, with price increases possible in the future depending on numerous economic and geopolitical events.

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