Given the strength of the dollar, the rise in debt and the decline in risk appetite, the question arises: why are cryptocurrencies still on the rise?
In the rest of the market, the gains in Solana (SOL) and Toncoin (TON) stand out, the latter with a rebound of more than 4%.
Despite the slight falls registered in the last hours, both Bitcoin (BTC) as Ethereum (ETH) have experienced a rise in the last 24 hours, reaching $27,800 and 1,658 Dollars respectively.
This positive behavior contrasts with the rise of bonds and the evident strength of the US dollar. The expectation of a more rigorous Federal Reserve (Fed) than anticipated has driven the appreciation of the ‘green ticket‘, reaching highs of the last 10 monthswhile debt has reached unprecedented levels in more than a decade, both in the United States and in other parts of the Atlantic. Despite this scenario, the consensus still foresees that the US central bank will not raise interest rates in the next two meetings which is scheduled for the remainder of 2023.
Bitcoin: why are cryptocurrencies still on the rise?
Given the strength of the dollar, the rise in debt and the decline in risk appetite, the question arises: why are cryptocurrencies still on the rise? According to some analysts, this could be attributed to movements in the spot market, triggering certain purchases andas a last resortthe covering of short positions by the bears, which would explain the rally in digital assets in recent hours.
Nevertheless, Michael Hewsonchief market analyst at CMC Markets UK, notes that “price action appears to be abnormally limited at the moment“. “The daily print in Bitcoin stands at just 14.98%, compared to 28.25% for the month, a pattern repeated in other tokens. Given the limits placed on FTX’s fire sale, it seems unlikely that the additional liquidity it is providing will be enough to reduce volatility so far,” he adds.
In this sense, recent data from the cryptocurrency analysis platform IntoTheBlock indicates that holders of BTC In the long term they continue to maintain their assets despite market turbulence. Long-term holders are investors and companies that bought their cryptocurrencies at least a year agoand currently own 13.44 million tokens, which represents 69% of the circulating supply in the market.
“In my view, the decline in trading volumes and the shift towards long-term holding comes at a time when the price of Bitcoin is stabilizing around $26,000. Short-term BTC holders are currently holding onto their funds, incurring unrealized losses as the cost basis rises above the current spot price. As a result of these factors, interest in Bitcoin as a short and medium-term investment has declined, which has been reflected in the recent declines in US stock indices, especially the Nasdaq and S&P 500. Interest in owning and investing in BTC among new investors remains low amid the current economic uncertainty and global instability of markets and economic conditions,” concludes Gule.
In the business field, it is worth highlighting the departure of Binance from Russia and the information that suggests that the Kraken crypto exchange You would be considering the possibility of incorporating traditional stock trading into your platform. In addition, Yesterday the president of the Securities and Exchange Commission appeared in Congress (SEC), Gary Gensler, who again expressed harsh criticism of cryptocurrencies. However, Gensler acknowledged that Bitcoin was not considered a security, so it cannot be regulated under current SEC laws.
In the rest of the market, the gains in Solana (SOL) and Toncoin (TON) stand out, the latter with a rebound of more than 4%.
Source: Ambito
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