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Why did the first cryptocurrency rise in price in the second half of March and how its price will change in the near future
In mid-March, the price of bitcoin fell to $37.5 thousand, after which it began to grow rapidly. By March 28, it reached $48.1 thousand, having risen in price by 28% in two weeks.
As of 15:55 Moscow time on April 2, the first cryptocurrency is trading at $46.8 thousand. RBC-Crypto experts told what caused the market growth in March and what to expect in the near future.
“Buyers are determined to raise the price above $51,000.”
Financial Analyst BitRiver Vladislav Antonov
Over the past two weeks, the cryptocurrency has been rising in price against the background of the recovery of US stock indices and favorable technical factors. Between Bitcoin and SP500 futures, the correlation is 0.83 for 30 days, and 0.66 for 90 days.
Many coins in pairs with the dollar or USDT stablecoin have broken through important price levels. After the breakthrough, they continued to rise in price, attracting new investors. The BTC/USDT pair broke through the important levels of $42K, $44.5K and $46K, which paved the way for Bitcoin to $51K. Buyers are determined to raise the price above $51K for Bitcoin.
The American stock market will continue to have a strong influence on cryptocurrency, as it, along with stocks, is classified as a risky asset. From a sharp increase in the rate of bitcoin and other cryptocurrencies, expectations of an aggressive rate hike by the US Federal Reserve in May are holding back. If the SP500 and Nasdaq indexes continue to recover, then we can expect a faster increase in bitcoin to $55 thousand.
“Cryptocurrencies make it possible to get more”
Head of Analytical Department AMarkets Artem Deev
The growth of the market in March is a consequence of investors’ fears about the prospects for a recession in the global economy and an increase in inflation rates in developed countries to record levels. Investors are looking for opportunities to save their money in assets that can provide growth in the face of the depreciation of familiar papers and investments.
In the EU, Germany, Great Britain, the USA, inflation is at a maximum in 40 years. The policy of central banks clearly shows that the prospects for tighter monetary policy are already a reality, which means that the yield of the usual instruments will be reduced.
Treasury yield inversion in the US shows a recession in the near future, the growth of global inflation is gaining scale and the prospect of dragging on for a long time. Cryptocurrencies provide an opportunity to get more than other assets – this is the reason for the influx of investors’ funds into bitcoin and other coins.
It can be expected that the growth of negative manifestations in the world economy and in the economies of developed countries will intensify this trend. It is likely that in the near future bitcoin and other coins will receive an even greater influx of investor funds, which means that their rate will grow. Bitcoin may well return to records above $60,000 during the second quarter of 2022.
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