The wait for recovery in bitcoin may be long

Bitcoin, the largest cryptocurrency by market capitalization, may have a long wait to recover from. This signal is coming from some technical indicators. Firms and investors associated with the crypto market have suffered a lot due to the huge fall in the price of bitcoin.

The major reasons for the decline of this most popular cryptocurrency for almost two months are the slowdown and increase in interest rates by the central banks of many countries including the US Federal Reserve. Apart from this, rising inflation is also affecting it. As reported by Reuters, the price of the cryptocurrency has declined below its 200-week moving average of around $22,600 and its 200-day moving average of around $35,500. It has been around the 200 week moving average for more than a month.

Valkyrie Investments says that indicators are showing signs of an uptrend but it is not clear how long this will happen. Usually, after three to six months of being around the 200-week moving average, there is a possibility of a price rally. Even about three years ago, bitcoin had been around the 200-week moving average for almost three months. However, due to other reasons like slowdown and selloff in the crypto market, it may take almost a year for it to pick up. Some other technical indicators are showing some levels of support for bitcoin. It ranges from $12,000 to about $20,000. Due to this, there is also the possibility of a big decline in bitcoin again.

Spot trading on major cryptocurrency exchanges declined nearly 27.5 per cent to around $141 trillion in June. This is the low level of the last one and a half year. Michael Saylor, CEO of business analytics firm MicroStrategy and a supporter of cryptocurrencies, recently commented on the true value of bitcoin. With inflation in the US hitting a record high of 9.1 percent and weakening of other currencies against the dollar, many people don’t understand that 1 bitcoin is not worth more than 1 bitcoin, he said. He made it clear that he does not compare the prices of cryptocurrencies with normal currencies and that the price of bitcoin has not been affected by its real value despite strong pressure from macroeconomic conditions.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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