Late February was not a good time for people who were investing in Bitcoin as the currency plummeted from its all-time high of $58k to under $47k in just a couple of days. However, it stopped due to constant buying from investors and the return of institutional players helped bring it back beyond the $50k mark. Considered to be a critical requirement for restoring confidence, the cryptocurrency has continued to grow, reaching its highest value in the last couple of weeks. At the time of writing, the value is sitting between $56k and $57k, with a 24-hour gain of about 6%.
However, what most crypto investors are currently eyeing closely is the inflation data for the US that was released today. With expectations of increasing inflation to be revealed in the data, traders are continuing to invest in cryptocurrency. However, there is still the lingering fear that it could lead to a monetary stimulus unwinding from the FED that could affect Bitcoin value as well. The last five days have been that of consistent growth and victories for Bitcoin as it climbed back up from under $50k. One of the biggest factors behind the growth of Bitcoin is the hedging role it is playing against the country’s fiscal policies.
The steep rise in inflation expected in the data could lead to a massive increment in Bitcoin’s value. However, the impact it would have on the economy could mean an initial drop in the value of Bitcoin with potential sell-offs. This is because the high inflation along with the stimulus announcements is creating a concoction that is increasing inflation. The result could be a tighter stimulus from FED and an increase in the treasury yields which also impact Bitcoin negatively. This was also observed in February when the increased treasury yields announced by the Federal Reserve led to a drop in the value of Bitcoin.
Right now, Bitcoin is free from all other resistance and seeing a strong rise in its value. The only immediate barrier insight is the current all-time high value of $58,332. With the market feeling positive about the cryptocurrency’s growth, we could even expect it to cross the next immediate ceiling which is $60,000. The currency seems to be performing well above the competition right now, with both treasury yield and S&P futures values showing significantly lower gains.
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