Bitcoin is recovering and is slowly moving back into positive territory after its major slide last week. On Monday, bitcoin experienced a significant fall, standing at $32,982.11, its lowest since July. This is according to Coin Metrics. However, the largest Cryptocurrency went up 5.6% during the afternoon trading and stood at $37,183.25. Ether dropped to its lowest since July at $2,176.41 and rose 1.1% to $2,444.85, according to Coin Metrics.
According to Vijay Ayyar, Luno’s vice president of business development and international expansion, bitcoin is expected to test the $30,000-$32,000 level given current market sentiment. He believes that if the Cryptocurrency stays over $30,000 for a week, a base will develop at those levels before the market surges higher. Given the lack of confidence across the board, he noted that it might take some time for the market to turn positive. Various other experts also believe $30,000 to be the next level for Cryptocurrency to test.
Bitcoin is recovering, but inflation is a concern.
Inflation is also a source of concern for investors. Bitcoin supporters have long claimed that the digital coin offers a hedge against inflation, but many newer investors are skeptical. With institutional interest in bitcoin surging last year, there are more short-term investors in the crypto market than ever before, pricing bitcoin like a technology stock. According to analysts, a more hawkish Federal Reserve might take the wind out of the crypto market’s sails.
The CEO of Valkyrie Funds, Leah Wald, said the following statement “Looking forward, our most immediate concern is how equities markets respond to this week’s Fed meeting, especially after having just endured their worst week since the global onset of Covid.” She went on to say, “A consolidation in stocks would lead to a risk-on environment where traders are more willing to take on additional risk assets such as bitcoin since digital assets have become increasingly correlated to equities as more companies continue to add bitcoin to their balance sheets.” Leah believes that volatility will continue to be expected for bitcoin at least short term.
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