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The Price of Bitcoin Surprised us Again

The price of Bitcoin Surprised us Again

BTC indicates price recovery after sharp drop;
Other cryptocurrencies recorded even greater losses;

Bitcoin chart analysis

Bitcoin prices have recovered from yesterday’s sharp drop to $ 23,900. Today, we have a continuation of the recovery, and the price is consolidating around 30,000 dollars. Moving averages have moved to the bullish side again, and based on these parameters, and we can expect a continued recovery in prices. Our next bullish targets are $ 31,000, level $ 32,000. If Bitcoin manages to climb above those levels, we can hope that the price rises to $ 35,000 levels, where we were at the beginning of the week. For the bearish option, we need a new negative consolidation and a price withdrawal below $ 30,000. After that, we return to negative territory again, and then it is possible to see an even higher pullback price.

Market overview

The prices of bitcoin and other cryptocurrencies follow the stock exchange indices but with much higher losses, which definitely shows that they did not justify the role of custodians of value in uncertain times.

Wall Street was hit by a perfect storm this year. Fear of high inflation, the Fed’s tightening monetary policy and the looming recession have triggered investors fleeing risky assets and seeking safer havens. You would think that the ideal time to bet on bitcoin as a shelter from all these plagues.

Other cryptocurrencies recorded even greater losses. Yttrium, the second-largest capitalist, lost about 36 % in a week, and some currencies in the top 10, such as the Solana and Cardano shafts, lost more than 50 % of their value.

Although, until recently, it was believed that cryptocurrencies could be custodians of value in uncertain times, it turned out that the movement of their value correlated with the movement of stock exchange indices. At the same time, price oscillations on the crypto market are even stronger than on the stock markets. By comparison, the S&P 500 has fallen about 17 % since early 2022.

There is another reason that increased the intensity of the fall in cryptocurrencies. Investors in the crypto market were especially worried about the collapse of the currency Tera USD, the third-largest stablecoin, created to maintain parity with the dollar.

Decentralized, algorithmic stablecoin supported by a combination of digital assets, including bitcoin, should be firmly balanced with the dollar.

However, instead of the dollar reserves on which the other two leading stablecoins are based, the force relies heavily on market forces. It works in tandem with Terin’s original token, the moon. Users can exchange the moon worth $ 1 for 1 UST and vice versa, theoretically ensuring that its price follows the dollar. However, the UST dollar parity has proven vulnerable in periods of high market volatility. After the moon lost investor confidence and sank more than 90 %, it collapsed and drove away, losing more than 50 % of its value.

After the current earthquakes, the question arises as to how much investor confidence in the entire concept of cryptocurrencies has been damaged. “We have no historical precedent for how bitcoin and other cryptocurrencies could work if we enter a long period in which central banks are actively withdrawing liquidity,” said Steve Sosnik, chief strategist at Interactive Brokers.

The problem is that bitcoin has not proven to be a protection against anything, concludes Forbes analyst Taylor Teper. After all, with inflation at its highest level in four decades, it would be expected that a currency that wants to retain its purchasing power and be independent of any central bank will gain more followers.

The post The Price of Bitcoin Surprised us Again appeared first on FinanceBrokerage.

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