Since the beginning of the year, cryptocurrency prices have shown large rallies. On January 1, 2023Bitcoin had a value of $16,500 and this Tuesday it closed at around US$ 26,000, which represents a 50% increase. The rise also occurred in other cryptocurrencies. Ethereum increased 42% and Solana rebounded 100% in its price.
Gold, an asset that attracts investors in times of market volatility, it has increased a little more than 3% during this year.
According to Guillermo Escudero, Country Manager of CryptoMarket, despite this increase “volatility was more than present”.
Why Silicon Valley Bank fell and what the Federal Reserve can do
Escudero explained to PROFILE that from January 1 to February 20 there was a jump to US$ 25,000, but then fell back to $20,000 “Not only due to macro uncertainty in the market or the continuous increase in rates, but also due to the systematic risk of the crypto market itself, with companies that continued to go bankrupt or even with the SEC, prohibiting large crypto firms from offering financial services.”
“The bankruptcy of 3 US banks (SVB Silicon Valley Bank, Silvergate and Signature Banks) generated a kind of 2008 luck (subprime banking crisis) and, beyond the fact that one of the three banks mentioned offered a crypto service, there was a strong liquidity inflow to the crypto market which brought Bitcoin back to $26,000,” he added.
For Escudero, “in the face of banking crises, the essence of Bitcoin as a non-banking system is ratified in its principle of being an alternative system to the current one.”
“We must not forget that We come from a 2022 where the cryptos collapsed up to 80%Therefore, an increase of 50% is not enough to recover even half of the drop in previous months,” said Agustín Abraham, Co-founder & CPO of Let’sBit.
Abraham added that “what happened with the banks and stablecoins in the last weekend I think that ended up strengthening cryptocurrencies. It could be interpreted as a new test which Bitcoin and the crypto market in general passed.
Will cryptocurrencies continue to rise?
With the upward movement in these 75 days of the year, the question arises about if it is a trend that will continue in the coming months. “It is very difficult to determine. What is being seen in recent months is that Bitcoin and cryptocurrencies are being very susceptible to changes in the ‘traditional’ market and US economic policies,” Abraham said.
“If next week the Federal Reserve raises interest rates again, it would not be unusual for Bitcoin to go lower again.”
For his part, Escudero opined that “the current crypto market is temporarily in a kind of optimism for the remainder of the year, with an interesting support to respect between US$ 23,000 and US$ 25,000”, he stated.
Hayden Hughesco-founder of the Alpha Impact social trading platform, told Bloomberg Linea that sustained moves above the 200-day moving average are usually early indicators of a bull market.
“If we stay at $25,000, the next stops would be $28,000 and $30,000,” he predicted.
Fabiano Dias, Business Developer at Bitwage, noted that “it may be too early to say 100%, however it seems at first glance that the Fed’s currency crisis is putting pressure on banks’ management, thus making their job more difficult.” And it leaves them even more insecure.”
LM / ED
You may also like