Bitcoin Grows Muscles, But For How Long?
Bitcoin broke critical $45K resistance and is back to the $47.5K highs not seen since the beginning of January. With over a 6% price jump today, the leading crypto is back on an uptrend for nearly two weeks now.
The whole crypto market is green and bullish and valued at more than $2 trillion again. The question is why and whether it is long-lasting?
What Caused Market Recovery
There is no single reason why the crypto market is greening. It is more likely that multiple smaller-scale factors are driving the price.
One of them could be stock market recovery. The major indexes like S&P500, Dow Jones, Nasdaq 100 increased from 6% to 8% during the past weeks despite the global recession forecasts, caused by the war in Ukraine and rising oil prices. At the same time, Bitcoin’s correlation with stock market movements reached the highest level since 17 months, meaning that BTC is much more in sync with the stock market rather than with traditional safe-haven assets like gold.
Secondly, Bitcoin is in demand among the whales. Luna Foundation has already bought more than $1.1 billion worth of Bitcoin to build a reserve for its stablecoin UST. Moreover, the founder of the Terra, Do Kwon, declared a plan to build $10 billion in Bitcoin reserves.
Plus, the increasing number of big capital explores the possibilities to enter the crypto space. The world’s largest asset manager BlackRock prepares to offer a cryptocurrency trading service to its investor clients. The skepticism against cryptos is melting and even US Treasury Secretary Janet Yellen acknowledged that “there are benefits from crypto and we recognize that innovation in the payment system can be a healthy thing”.
What’s on the Horizon?
The fundaments seem capable to drive Bitcoin’s momentum further to the next resistance level of $52K. The growth could be even higher and rally to $65K or above if BTC breaks the nearest resistance.
But despite the positive facts, there are several factors on the horizon that could bring Bitcoin’s steep growth at risk or even push the price back below $45K.
First of all, European Union countries and the United Kingdom are tightening regulatory rules on digital currency service providers. The legislative updates are planned to come into effect in the nearest future as a response to the increased risk of cryptocurrency usage to avoid economic sanctions.
Apart from that, from this Friday, April 1st, India will start charging all its cryptocurrency users 30% taxes on any cryptocurrency assets sold at a profit. As cryptocurrencies have seen an exponential increase in interest since 2020 in India, the country has one of the largest numbers of cryptocurrency owners in the world.
Read more: https://dailycoin.com/bitcoin-grows-muscles-but-for-how-long/
Text source: DailyCoin.com
