Bitcoin accelerates towards $30,000 as risky assets ease up

Moving forward, the cryptocurrency is approaching the $30,000 level, which is the highest level in a week. The increase in assets in the year again touched about 80%.

Paul Hickey of Bespoke Investment Group said in a note on Tuesday (19) that bitcoin is trading around the 50-day moving average. He said that the important level to watch is $27,500. If the currency stays above this value, as it is today, the prices will not tend to fall.

Despite the price rally this year, bitcoin is still trading less than halfway from the record $69,000 reached in November 2021. A series of industrial scandals and bankruptcies last year have reduced the digital asset’s appeal to many investors.

“We have seen a decrease in volume, market depth, and liquidity, which translates into greater volatility,” Ambre Soubiran, CEO of crypto data provider Kaiko, said during an interview with Bloomberg TV. “For now, this is an indication that while there is positive sentiment towards the price of these assets, the market has not returned to its pre-crisis 2022 value in terms of volume and market depth.”

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Multiple anecdotes helped fuel Bitcoin’s rise, including that the asset functions as a file hedge inflation, which can be used to circumvent weaknesses found in traditional banking systems. For Bespoke’s Hickey, changes in bitcoin’s relative strength tend to align with changes in the S&P 500 rather than leading moves in the stock market.

“Comparing the performance of the S&P 500 to the relative strength of Bitcoin versus the S&P 500 shows a loose but unconvincing correlation between the two chains,” he wrote in the note. “While bitcoin and the crypto space have little to do with the stock market, some traders are watching the space believing it provides a good measure of risk appetite in general.”

Bitcoin’s ratio to the S&P 500 peaked about two months before the S&P 500 peaked in late 2021 through early 2022. But when the benchmark bottomed out in October, Hickey noted it took another two months. Paid.

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(with information from Bloomberg)