The current situation in the crypto market is quite interesting offering a lot of great insights into what is happening with the global economy. The whole market is in turmoil with indices and stocks not showing any signs of a recovery in the nearest future. On the other hand, prices of some commodities are soaring (natural gas futures are through the roof) putting significant pressure on countries where these commodities are needed the most.
The British Pound is still in a questionable position despite being able to recover some of its losses and the Euro is looking shaky ahead of inflation numbers announcements.
BTC is still doing quite well
The flagship token of the crypto industry Bitcoin is doing surprisingly fine despite the overall contraction of the crypto market. With many huge investors seeing the weak position of the British Pound and Euro, traditionally trained fund managers are looking into buying government-issued bonds from the US and other financial instruments from the US economy to protect their portfolios from potential turbulence in Europe.
However, the new wave of investors is moving the capital to crypto. In theory, Bitcoin should act as a hedging mechanism against Central Bank-controlled fiat currencies. With the US dollar improving its position in the global arena, the perspective of the stock market doing fine is close to non-existent. There is only one good bet in the financial world right now. It is cryptocurrency.
BTC is firmly above the $19K support line which is more than a promising position for this asset. We all hoped that it could fortify around the $20K or even $21K level, but it did not happen. Instead, the price has been stabilizing around the $19K level over the last week. While many argue that BTC is not growing, it is not losing 2% — 5% of its value every day which is exactly what is happening right now in the stock market.
Should we expect a sudden surge?
If Bitcoin continues moving in the upward direction or, at least, stabilizes better than other traditional financial instruments, we might see an influx of capital holders interested in buying more Bitcoin and driving prices up. However, it is still too early to make predictions.