Bitcoin Price Deep Dive
Since the collapse of Silicon Valley Bank Bitcoin/Crypto has basically gone up.
Financial institutions are lacking the capital to cover risks and have unrealized losses. Banks hold debt instruments that are paying below the cost of capital. This is one reason why Bitcoin/Cryptos went up and if this situation does not repair itself and financial institutions are in deep trouble this could have a positive impact on the price of Bitcoin/Crypto.
I have read that a potential pause in federal interest rate hikes is a reason why Bitcoin/Crypto prices went up. Federal interest rates not going up will save the banks because it makes things more manageable for financial institutions. Also, there is a belief that interest rates could be lowered in the foreseeable future and this is factored into the markets. Basically, cheap money saves the financial institutions and provides liquidity for Bitcoin/Crypto and expensive money sends the banks broke. These two things are positive for Bitcoin/Crypto.
Recent strength in tech stocks and growth companies helped propel Bitcoin/Crypto prices but this is losing steam.
Lay-offs are a way to protect ROI but don’t support growth but one could argue that AI (artificial intelligence) is improving workers productivity and lay-offs are not hindering growth potential.
Market optimism as
well as liquidations of short positions helped push Bitcoin/Crypto prices
higher but currently there is a pullback. Some people are saying, the price
increases were a DEAD CAT BOUNCE and as the price of Bitcoin and ALTS retreat
there could be some truth to this.
Predicting the short-term price movements of
Bitcoin/Crypto is extremely hard.
In addition, there are a lot of geopolitical
matters that need to be taken into consideration to predict price movements. I
also believe that natural disasters and epidemics could play a role in the
price of Bitcoin/Crypto.
I hope this article helps you in regards to Bitcoin/Crypto analysis.
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