BITCOIN rebounds from the lowest level since June

sgt24 (29)in #bitcoin • 2 years ago

On Wednesday morning, the price of bitcoin dropped below $19,000, briefly reaching its lowest level since June due to a decline in stock markets worldwide and the U.S. dollar's sustained growth. The value of the entire cryptocurrency market also went below $1 trillion as digital coins across the board suffered a sell-off.

Late in the day, Bitcoin's price managed to climb back above $19,000 again. According to Coin Metrics, it was last trading less than 1% higher at $19,044.30. Ether, which has increased in value significantly more recently than bitcoin, was trading at $1,571.20 as of this writing.

With tighter monetary policy, central banks from all around the world are battling rogue inflation. The U.S. Federal Reserve has raised interest rates a total of 2.25 percentage points in a series of moves. Markets anticipate a continued rise in interest rates.

The Fed's tightening of monetary policy has increased the currency's strength, which has hurt risky assets. The yield on the 10-year US Treasury has also increased. Since equities and bitcoin have historically traded in tandem, if stocks' value fall, bitcoin's value generally does too.

"The macro environment also continues to prove difficult with the dollar continuing to put in highs. This impacts all risk assets as we can see," Vijay Ayyar, vice president of corporate development and international at cryptocurrency exchange Luno, told CNBC. "If we see the dollar start to move back down, then we should be able to get risk assets such as bitcoin move back up again."

Since its peak in November, approximately $2 trillion of the value of the cryptocurrency market has been wiped out. Bitcoin has fallen off by roughly 60% from its November record high of $68,990.90. A challenging environment for risk assets and problems particular to the cryptocurrency sector, such as failed projects and widespread bankruptcies, have contributed to the sell-off.

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Ethereum merge in focus

Since June, the price of bitcoin has fluctuated only between $18,000 and $24,000. Luno's Ayyar said, "Bitcoin typically likes to go back and test previous lows to see if they hold as support." Unless bitcoin drops below $17,500, he claimed, the market will most likely consolidate between $18,000 and $24,000.

Ether and other so-called altcoins, or alternative currencies, have managed to soar above bitcoin in the meantime. Since both cryptocurrencies hit a low in June, ether has surpassed bitcoin. The native cryptocurrency of the Ethereum network is called ether.

This month, Ethereum will undergo a significant upgrade known as "the merge" which its supporters claim would increase network efficiency, attract new investors, and result in higher returns.

“Ethereum hit yearly highs against the bitcoin pair in anticipation of the merge,” Ayyar said. ” Hence there has been a lot more interest and activity in the Altcoin space, while Bitcoin consolidates.”