- Investors are skeptical as to whether Bitcoin price will touch $30,000 or $25,000 first.
- Some triggers weighing down the price of the asset include interest rate hikes.
Bitcoin (BTC) has dragged the broader digital currency ecosystem into a bear zone after dropping to a price of $26,710.42, atop a 2.04 percent loss in the past 24 hours. The current outlook in the price of Bitcoin has shown the propensity for market participants to follow whatever trend the broader stock market is trailing in the short term.
Bitcoin started the week with very mild volatility and the price traded well above the $27,000 resistance level on Monday and Tuesday before breaching the flipping the trend overnight. Per the current twist in the price of the biggest cryptocurrency, investors are now more curious as to whether or not the coin is closer to hitting $30,000 or receding back to $25,000.
There are a number of factors that will determine the direction of this price movement. The current economic outlook in the United States as the country is on the brink of its first debt default in history has continued to rattle the markets. With no one certain as to what the impact of the default will be, investors have generally been avoiding risk assets, particularly those that are as volatile as Bitcoin.
With the uncertainty around, the market has largely sustained its sideways movement, a trend the industry picked on with the broad implosions of key players in the past year. Experts have pointed out that liquidity is neither flowing into the industry through new investments nor investors taking out funds.
“After the market tumult of 2022, sideways movement has felt a lot better than downward movement,” Tim Frost, CEO of digital wealth platform Yield App, said in an emailed statement sent to CoinDesk.
it does feel like crypto markets are stagnating. Right now, we simply have existing liquidity moving around in different directions, with really only the crypto true believers and active traders still participating.
Bitcoin Price: Factors to Watch
The growth in the price of Bitcoin and practically any other digital currency that shows a correlation with it will depend on a number of factors that can either attract new money or not. The injection of cash from institutional investors as American business intelligence firm, MicroStrategy Incorporation has done in the past can be a major trigger toward uplifting the price of the asset.
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Favorable monetary policies cannot also be ruled out in the move to fight inflation. The efforts from Central Banks around the world, including that of the US Federal Reserve in the form of interest rate hikes have largely helped taper inflation down to their lowest level since after the Coronavirus pandemic.
Investors will need to watch out for hawkish moves as well as the trends being exhibited by stock market indices including the Nasdaq Composite and the S&P 500 Index amongst others.
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