Bitcoin: how to explain the $100 billion growth in cryptocurrencies despite rising interest rates in the US?
Thin line: Bitcoin has bounced back to $23K and many altcoins have followed suit. What is this movement against the tide due to?
Contrary to predictions similar to those made days before the Federal Reserve Bank meeting on the 13th, bitcoin and other cryptocurrencies experienced an impressive take-off after a new meeting at the Fed yesterday (27), increasing their market value by more than $100 billion.
Although already expected, the consecutive increases in interest rates in the US pointed to a more bearish-prone BTC volatility, especially after the currency started the week with a drop in the $21k range, but that was not what we observed yesterday a few hours ago. after the Fed’s announcement.
So what can we see as contributing factors to this surprising rise?
A momentary breath or the “end of winter”?
This growth of bitcoin and altcoins such as Ethereum, Cardano, Ripple and Solana can be interpreted as a new lease of life for the market, which in the case of BTC appears to seek regions between 26 and 30 thousand dollars, but will probably not maintain this value.
As a further increase in the interest rate was already expected, it is not difficult to imagine a scenario in which bitcoin investors would have seen the value of 0.75% as positive, as it ended up being lower than expected.
Apparently, the 0.75% increase should be just one more in a series of readjustments to try to contain inflation in the United States. Therefore, it is safe to say that we are not yet to exit the bear market that the market is currently in.
It is always pertinent to remember one-off events that drastically affect the crypto market at least in the short term, such as the sudden announcement of the sale of 75% of Tesla’s bitcoins. Next month, we will have, for example, the entry of 138 thousand BTCs released from the lawsuit against Mt. gox. Depending on the destination given to this significant amount, the price of bitcoin can maintain its good momentum or fall again.
Another strong indication of what may happen to the price of Bitcoin is the movement of contracts involving the currency in the Options Market. A large volume of call and put options contracts expire tomorrow, so imagine a big “battle” between call option buyers and put option buyers, who will bet on the high or low of BTC.
Of course, the owners of these contracts can have their expectations frustrated if the change does not favor the chosen options, but the important thing here is to observe what most believe is the trend to be followed by Bitcoin, whether it will be bullish or bearish.
And you, what do you expect for Bitcoin in the coming weeks? Whatever your side, come to Foxbit’s Discord to chat about this crazy time in the crypto market with our wonderful community of traders and experts!