Bitcoin and other cryptocurrencies continued to rise today as concerns eased and markets regained risk appetite. However, experts differ on whether the surge will last.
Bitcoin, Ethereum and other cryptocurrencies continued their 6-day surge today.
Investors’ risk appetite also increased as better-than-expected corporate balance sheets were announced in the US and expectations that Russian natural gas supplies to Europe would start up again revived risk appetite and calmed recession worries.
Bitcoin, which is above 23,000 at midday, is up about 25 percent from the yearly low of 18,900. On the other hand, given the ongoing risks in the economy, investors are watching closely to see if the rise will last.
Bitcoin’s performance over the past week. Graphics: Binance
The fact that the expected rate hike by the US Federal Reserve (Fed) on July 27th fell from 100 basis points to 75 basis points also provided some relief for the markets. Markets started to price in a 100 basis point rate hike due to record US inflation last week.
ANXIETY REDUCED, RISK ATTITUDE INCREASED
Concerns in the markets also led to panic selling in risky assets like crypto and the stock market. However, the recent relaxation of the market and the partial dissipation of panic sentiment has propelled the bitcoin-led crypto market higher.
The fear and greed index also rose to 30, its highest level since late April, as the market returned to pre-Terra levels. A score of 30 on this index indicates market anxiety, while a score below 30 indicates excessive anxiety. As a result of the collapse of the cryptocurrencies Terra and Luna, the markets panicked and the sell-off accelerated.
THE LATEST SITUATION IN THE CRYPTO MARKET
With recent concerns priced in and as the year drew to a close, markets turned bullish and leading cryptocurrencies increased their daily gains.
Bitcoin traded above the 23,700 level in the afternoon with a nearly 8 percent daily gain, while Ethereum traded at $1,600, up 3.7 percent. Cardano was also trading at $0.52, up almost 8%, and Dogecoin at $0.07, up 10%.
The latest situation in cryptocurrencies with the highest trading volume on the market
Although sentiment has been bullish in markets since the start of the week, investors are concerned whether these increases will last. Bitcoin, which has been on a downtrend since its November peak of $67,000, tumbled over the year as central banks, particularly the Fed, tightened and the risk of a recession increased.
The leading cryptocurrency, which was trading at $48,000 levels in early April, has seen a huge plunge towards $18,000 over the past few weeks. As a result, the market wiped out much of its value and investors returned to safe havens, raising concerns about the limits of the recent rally.
KEEP CONSIDERING
It may not be easy for investors to regain their confidence in risky assets as the global economic outlook is not rosy, the risk of recession in economies is increasing and inflation is peaking.
Jin Gonzalez of Oz Finance said, “Bitcoin’s response, or lack thereof, is not vastly different from traditional markets. For now, bitcoin is likely to settle around $20,000, but a key event showing the market’s recovery is needed for it to regain strength. “As long as the forecasts are bearish, investors will remain cautious, so the market will not move significantly.”
‘THE LEVELS CAN BE RETURNED’
Although there are concerns in the market, some analysts have become more bullish on crypto assets, stating that recent moves have allayed panic sentiment in the market and that bad developments have been priced in so far.
Mark Newton, head of global technical strategy at Fundstrat Global Advisors, which conducts market strategy and industry research, predicted that Bitcoin could reclaim the $28,000 mark.
Noting that most investors are still taking big losses at current prices, Ki Young Ju, CEO of South Korea-based data verification firm CryptoQuant, stated that $30,000 could be the starting point for another bull run. When prices are in a bullish environment and are in an uptrend going forward, it is said to be in a bull market.
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