After A Tough Start To The Week, Bitcoin Recovered To The $30,000 Level!
On Monday morning in Asia, the largest cryptocurrency surged 1.8 percent to $30,450.It had fallen for seven consecutive weeks, the longest downward trend since August 2011. This mirrored the S&P 500’s seven-week fall.
Bitcoin Recovers In The $30,000 Area After Shedding Its Weakness From The Weekend!!
This price reduction comes as global financial markets, for the first time since early 2020, have entered the bear market territory. The drop in the Bitcoin price is due to a number of factors.
Geopolitical instability, rising inflation, and shifting US monetary policy are just a few examples. These crucial variables have continued to fuel increased short-term volatility in global stock and cryptocurrency markets.
Let’s See What Experts Are Saying!
“If the S&P continues to collapse, it should generate one final flush and a wonderful buying opportunity for Bitcoin,” said Mark Newton of Fundstrat Global. “There’s a lot of volatility, and we should be nearing a point in the next couple of months when you really want to get into it.”
Bitcoin has been struggling in recent weeks as the Federal Reserve raises interest rates and inflation remains high, implying that further monetary tightening is on the way.
While the token has been marketed as an inflation hedge in the past, it has recently shown to be highly connected with risk assets such as the Nasdaq 100, which has fallen as a result of the new regime.
“Bitcoin is likely to linger around $29,000 to $31,000 for the next few weeks,” Genesis Global Trading’s Noelle Acheson and Konrad Laesser wrote on Friday. They went on to say that some economic data releases, such as US GDP or inflation figures, “may change the narrative.”
Rick Bensignor, president of Bensignor Investment Strategies and a former Morgan Stanley strategist, uses DeMark technical indicators to argue that bitcoin won’t break out to the upside anytime soon.
DeMark technical indicators compare the most recent maximum and minimum prices to the previous period’s equivalent price to measure demand.
Further, In a note sent Monday, he wrote, “I’d still predict another four weeks of heaviness.” According to him, the May 12 low was around $25,425, and the subsequent rally retains support at $28,900 intact.
Further Crypto News
The income tax treatment of cryptocurrency has been regulated by Germany’s federal finance ministry. After one year, individuals in Germany can sell bitcoin (BTC) or ether (ETH) tax-free. Staking, lending, mining, airdrops, and hard forks are among the other crypto-centric operations covered by the German federal finance ministry standards.
Dapper Labs, the originator of NFT, revealed on May 10, 2022, that it has acquired $725 million in financing for the expansion of its Web3 developer community.
Given Bitcoin and other cryptocurrency values’ history of volatility, the rise does not ensure a long-term reversal. Bitcoin’s price will continue to fluctuate, as it is expected to fall as it continues to rise.
The concept of network effects gives bitcoin an advantage over its competitors. A network effect happens when the value of a commodity or service rises as a direct result of the number of people who use it.
Consider the early days of the Internet. It was definitely a unique idea if you were one of the first individuals to use this new technology, but it didn’t bring many benefits in reality. There was no one to whom you could send an email and only a few web pages to peruse.
More web pages were generated as the number of people who utilized the Internet expanded, and more functionality was provided, enhancing the overall worth of the Internet. Fast forward to today, and the Internet’s worth has increased due to the sheer amount of individuals who utilize it.
These same network effects will determine whether Bitcoin succeeds or fails. Bitcoin will have significant value if people trust it and prefer to transact with it, but it will eventually falter if they do not.
When more individuals start using bitcoin on a regular basis, its value will rise and the currency will stabilize. However, price fluctuations in bitcoin will continue to be the norm until then.