Bitcoin price bounces after CZ arrests rumors as traders eye $30,000 next
Bitcoin (BTC) hit new lows for the month to April 4, as fresh rumors about the largest exchange Binance spooked fragile markets.
BTC price bounces back to $28,000 after weekly fluff
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD down to $27,240 on Bitstamp.
The lowest performance since March 28 followed a burst of claims that Binance CEO Changpeng Zhao (aka CZ), already under investigation by US regulators, was now wanted by Interpol.
Their origin, an accidental leak of an encrypted tweet from the private Twitter account @Cobie, appeared to lack of evidenceand the markets recovered.
Now trading above $28,000 at the time of writing, Bitcoin was showing “classic” behavior, according to Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight.
“Classic swipe of Bitcoin,” he in summary.
Van de Poppe also referred to the macroeconomic climate, in particular a potential end to interest rate hikes by the US central bank.
“The trend remains up, as we are in a vacuum of ‘relief’ as the hiking process ends,” he continued.
“We’ll probably see Bitcoin continue to $40K, but if we’re going to have a test of $25K first, I’ll be a buyer.”
A subsequent tweet declared the local lows “swept” by BTC/USD, targeting $30,000.
Such optimism was shared elsewhere, including by trading resource Stockmoney Lizards, which joined calls for $30,000 to reach after a “short correction.”
Related: US law enforcement agencies turn up the heat on crypto-related crime
After seeing the equilibrium level (EQ) in the current $27,700 area, fellow trader Crypto Tony also remained bullish.
“Holding that EQ like a champ. No short hedges unless we close solidly below that level, but for now we remain in the upper half of the range,” told followers on the day.
US recession around the corner?
On the macro level, changes were also afoot, with the weekend’s oil production cuts in Opec+ forecast combined with weak US economic data to pressure the dollar.
Related: Bitcoin breakout ‘matter of time’ says analysis with BTC price at $28K
The US dollar index (DXY) was below the 102 mark at the time of writing.
For trading company QCP Capital, the writing was now on the wall when it came to a looming recession.
“USD and bond yields, both drivers of BTC, reversed sharply lower last night following the release of ISM Manufacturing – which showed the sharpest contraction since April 2020 (amidst the pandemic),” it wrote in its latest market update released. on the 4th of April.
“We expect more weak US data to come out this week, further cementing the recession narrative. After many false dawns, we think this will indeed be the lasting one.”
It noted that despite the potential for Bitcoin to benefit from the chaos, just as with last month’s banking crisis, it remained “unproven” as a safe haven during a recession.
“Should the Fed act quickly in a recession, just as they did during last month’s banking crisis, we expect BTC to moon again,” it continued.
“However, in a stagflation environment, if the Fed feels they are unable to cut interest rates until inflation has reached target again, will BTC follow risk assets lower? It remains to be seen. While BTC is unproven as an inflation hedge, it is definitely the highest the beta hedge for monetary irresponsibility out there.”
As Cointelegraph reported, the rise in oil prices was initially thought to risk a return of inflationary forces, allowing the Fed to continue its rate hikes.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
