Bitcoin hits $25,000 for the first time since June 13. For the first time since June 13, Bitcoin managed to cross the $25,000 mark overnight from Saturday to Sunday. However, this was only a brief increase since by Sunday morning its value had fallen back to $24,510.
No matter how brief it was, this burst of energy from the original cryptocurrency is a sign that the market is indeed recovering strongly thanks to not only fresher than expected US inflation data , but also to the progress made by the announced big Ethereum update.
The $25,000 Cap: A Key Resistance Level for Bitcoin
Very early this Sunday, the value of the largest cryptocurrency, Bitcoin, rose 2.2% to $25,031. A rather decisive event given that Bitcoin had been stuck below $25,000 for weeks.
Since this episode, BTC has fallen again and is currently trading around $24,176 according to CoinMarketCap. According to several experts, this further drop in price is a palpable sign that the $25,000 mark remains a key resistance level for Bitcoin at the moment. Once the latter is fully crossed, BTC should be able to grow more steadily and continuously.
After some analysis, it can be seen that Bitcoin has only seen an increase of around 5.85% over the past week, while Ethereum, the second cryptocurrency, has seen an increase of 16% over the same period. The latter is also enjoying considerable expansion in anticipation of the upcoming merger of its network towards a model offering more scalability and more ecological (The Merge).
Why such a sudden rise in the value of Bitcoin?
There is no denying that cryptocurrencies have had a tremendous amount of trouble in the first half of this year. A situation that is partly related to the fact that the Federal Reserve raised its interest rates considerably to fight against stubbornly high inflation.
Following this lift, rates, the prices of Bitcoin, Ethereum and other tokens fell by more than 50% quite quickly. Several reasons can therefore explain the rise in value that Bitcoin has undergone in the last few hours.
Last week, US inflation data was well below analysts' expectations. This increase is thus largely due to the cooling of inflation on the economy.
Indeed, the leading economic indicator remained unchanged over the past month as interest rate hikes by the Federal Reserve appear to counter rising prices.
Certain risky assets such as the Nasdaq 100 index having experienced strong growth at the same time, several crypto-currencies, including Bitcoin, received a positive impact following this news.
Of course, we must also take into account that the crypto market has been relatively fragile and investor confidence has taken a hit on certain points, particularly with the fall of Terra Luna last May.
What future for Bitcoin and the cryptocurrency market?
It's the entire market of the global economy, ranging from assets like stocks and bonds to cryptocurrencies like Bitcoin, that has been hit hard by rising inflation. The imminent appearance of a potential global recession has not really helped the situation.
Bitcoin, which has long been considered an excellent hedge against the inflation crisis, has seen its reputation as “anti-inflationary digital gold” put to the test this year.
Fortunately, the slowing rate of inflation could potentially pave the way for less aggressive tightening measures from the Federal Reserve. This, albeit brief, rise of the wedge above the $25,000 mark is a particularly heartening development for many in the cryptocurrency community who had been watching prices sink since the start of the year.
For billionaire investor Mike Novogratz, the worst of the crisis is already over in the industry. According to him, while it is true that the problems currently facing the market have certainly increased the mistrust of investors, the argument in favor of Bitcoin is still as strong as ever.
It is an asset that remains number 1 in the market and it is difficult to ignore it.
However, it should be noted that despite recent encouraging signs of a possible encouraging rebound, Bitcoin is still down 64% from the all- time high of $69,044.77 it may have reached in November 2021.
Will Bitcoin manage to get closer to its record value again? For some like CZ (Changpeng Zhao), the CEO of Binance it is obvious, even if it will take time while for others like Peter Schiff Bitcoin will collapse.
READ MORE: Ethereum At The Top And Bitcoin Soars
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