Experts Spoke to CNBC: Will the Rise in Bitcoin Continue?
Bitcoin (BTC) has crossed the $ 17,000 level again after a long Decease, a leading analyst told CNBC his views on the current rise.
Dead Cat Splash!
Bitcoin has been affected by 3 fundamental factors recently. As if the Fed’s interest rate policy and macroeconomic conditions were not enough, bankruptcies and crises in the sector caused big declines. As the domino effect on the FTX crisis continues, the protests in China continue to cause concern. The supply chain crisis, the correlation between inflation and high interest rates may pose a new risk Decisively for Bitcoin.
However, today both Bitcoin and altcoins have started to gain momentum. But as the China factor continued, at the closing bell on Tuesday, the S&P and Nasdaq finished in the red, down 0.16% and 0.5%, respectively, while the Dow eked out a 0.01% gain for the day. While Bitcoin touched the $17,000 level again, it is currently trading at $16,901.
Vijay Ayyar, vice president of institutional development and international at cryptocurrency exchange Luno, said that the current rise is probably the result of “overly leveraged short positions”. Ayyar stressed that the Bitcoin price has encountered “resistance” at $ 17,000 and will probably fall further. According to the expert, the current rally in Bitcoin is a dead cat bounce. Investors’ trust in cryptocurrencies has been severely damaged after Sam Bankman-Fried’s exchange FTX filed for bankruptcy this month, sending shockwaves through the entire industry.
Attention, the Fed Chairman!
In the crypto currency market, the domoni effect is gradually spreading. Crypto credit institution and exchange BlockFi has filed for bankruptcy due to its exposure to FTX. With the collapse of the algorithmic stablecoin TERRAUSD in May and the bankruptcy of hedge fund Three Arrows Capital, $1.3 trillion has evaporated in the cryptocurrency market this year. The collapse of the FTX made the situation even worse.
Investors will be closely watching U.S. Central Bank Governor Jay Powell’s speech at the Brookings Institution on Wednesday for clues about the central bank’s interest rate plans. If the market gets the impression that the Fed will slow down its rate hikes, risky assets such as stocks and Bitcoin may start to rise again. The domino effect created by the Fed interest rate policy and the FTX crisis is currently seen as the biggest obstacle in front of crypto currencies.
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