Where Bitcoin is than banks
According to reports, the recent collapses of US banks seem to have driven up the price of the most popular crypto of all, Bitcoin.
So what is happening to the financial market? And what are the implications for the blockchain industry? Here is everything you need to know.
Banks collapse, Bitcoin rises
As expected, the price of Bitcoin continues to rise as US banks continue to fail, helping to reinforce the increasingly positive view of cryptocurrencies.
Which actually receives not insignificant amounts as the stock market goes down due to banking problems.
Specifically, Bitcoin, the largest digital asset by market capitalization, rose another 4.4 percent $28,892 on Tuesday.
This means that renewed fears about the stability of the US financial system have increased the price of cryptocurrencies.
Not surprising, Etherthe second largest token, is also up 3.7 percent.
In particular, the gains come as regional US banks led a sell-off in US stocks after the collapse and sell-off First Republic Bankprompting the Federal Reserve to suspend further rate hikes to protect the economy from financial fallout.
LMAX Group Marketing Strategist Joel Kruger had this to say:
“The ongoing stress related to weaknesses in the banking sector has helped to positively highlight the value of owning self-backed decentralized currencies.”
Banking uncertainty strengthens the case for bitcoin, why?
The aforementioned turmoil in the financial sector, in particular, inevitably helps strengthen the case for a currency like bitcoin, which is beyond the reach of a central bank, advocates say.
In addition, the Federal Reserve is expected to raise interest by a quarter of a point at the meeting on Wednesday in an attempt to combat still high inflation rates. However, traders still expect a rate cut by the end of the year. Not surprisingly, Kruger said:
“We are seeing a wave of broad-based US dollar weakness based on expectations that the Fed will issue a less aggressive statement at its next meeting. This has pushed yield spreads against the dollar which in turn has possibly helped support cryptocurrencies.”
In fact, any rate cuts should support risky assets, including bitcoin, which is fueling some of the recent gains in cryptocurrencies.
On the other hand, Noelle Achesonauthor of the “Crypto Is Macro Now” newsletter, cautioned against expectations of short-term interest rate cuts, saying:
“Bringing down inflation must continue to be a priority as long as the market can bear it. We see a lift in risky assets, but it may not last long – a lot depends on this coming Friday’s jobs data.”
Focus on the price of Bitcoin (BTC)
As expected, the price of Bitcoin (BTC) has recently climbed back above $28,000, which is a key resistance level that will provide a solid base in case of a bearish pullback.
Logically, now that the price of BTC is back, the excitement surrounding the popular crypto has only increased, and many experts are wondering if it will $35,000 in the near future.
In particular, a well-known analyst, Michael van de Poppebelieves that the price of bitcoin may exceed $38,000 to $42,000 in the coming days.
However, although the price of bitcoin has maintained a good recovery since the beginning of the year, the volume has remained relatively low.
As we know, a rally with decreasing volume generally indicates a decrease in the number of buyers, which may be mainly due to their exhaustion. In other words, if sellers become more aggressive, the price of BTC may not be able to sustain the current rally.
However, this does not mean that this is the end of the currency’s important rally, as the price of BTC continues to give bullish signals.
In addition, altcoins may also start to show an upward price trend when the price of BTC exceeds $30,000. Keep in mind that this may take a few months, according to Michael van de Poppe.
