A key driver behind a 6.4% surge in the price of Bitcoin (BTC) may have been the announcement by the U.S. government of a potential 30-day ceasefire in Ukraine, as long as Vladimir Putin is in agreement.
A ceasefire on the table – Russian response awaited
Talks between U.S. and Ukrainian officials in Jeddah, Saudi Arabia, which lasted more than 8 hours, have ended with the Ukrainian delegation agreeing to a potential 30-day ceasefire across the entire frontline. The agreement includes the possibility to extend the ceasefire with the assent of both sides.
It now remains for Russia to show willingness to accept the ceasefire, and for major negotiations on ending the war to take place. A possible sticking point is that some Russian officials, like State Duma Deputy Viktor Sobolev, argue that a ceasefire would enable Ukrainian forces to regroup and rearm.
Markets rally, but Trump tariffs still weigh heavily
That said, with the possibility of a ceasefire still on the table, a 1.9% rally in the S&P 500 did occur on Tuesday, although more than 1% of this was eventually erased by the closing bell. Reasons for this indecisiveness is probably the ongoing effect of the Trump tariffs, which are still weighing heavily on markets.
Another factor that will be thrown into the mix later on Wednesday, is the release of the U.S. CPI Report. According to the Wall Street Journal, the report is likely to come in slightly better than “January’s surprising hot reading”.
Strategic Bitcoin Reserve legislation
When the stock market is up, Bitcoin is usually up. This was very much the case on Tuesday. Bitcoin outperformed the S&P 500 quite handily with as much as a 6.4% rally. The reason for this better showing may have been the announcement that Congress would introduce Strategic Bitcoin Reserve legislation to the House.
This was duly delivered, but with a dynamite inclusion that the government would commit to buying 1 million BTC over the next 5 years. Of course, the bill will need to pass through both Congress and the Senate, but if successful, this would have far-reaching consequences for Bitcoin.
$BTC breaks out of short-term descending trendline
Source: TradingView
The short-term chart for $BTC displays mixed fortunes for the price. From the very bottom, the price rose more than 9% on Tuesday. Also, with positive news echoing across markets, the bulls were able to push the price up and through the short-term descending trendline.
On a less positive note, the price did come up against the resistance of the last swing low formed early in March, and looks to be facing rejection. This is also the level of the 0.382 Fibonacci. Furthermore, the 4-hour Stochastic RSI has topped, and it might be expected that the price will correct back down from here, or at least chop around until the indicator lines hit the bottom once again.
The last opportunity to buy Bitcoin?
Source: TradingView
The weekly chart for $BTC still looks positive. If the price does come down and confirm the adamantine horizontal band of support below, the likelihood of it being bought back up quickly is very strong.
The major horizontal support is also the top of the last bull market. For the price to drop through here and confirm below, would probably signal the end of this bull market. It should be borne in mind that no previous bull market has experienced such an occurrence.
One also has to look at the present political environment in the United States. Never, in the history of Bitcoin, has such a benign and favourable climate existed.
With this in mind, it may be that this current correction could be the last opportunity to buy before Bitcoin makes its way to its next all-time high. The next few weeks will either favour this thesis or not.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
