BTC Would Take A Toll Further By 40% Plunge Says Mark Mobius
Whether you believe that the recent collapse of the FTX will cause a serious deluge of losses for investors in BTC, it’s important to realize that there is an abundance of cash available to be invested. And as long as interest rates continue to rise and monetary policy continues to tighten, investors can continue to bet on the price of BTC to go up.
Rise in interest rates
Traders are nervous about the rise in interest rates for Bitcoin. This is a major concern since interest rate increases affect the price of major digital assets. The potential return on these investments drops as the costs of borrowing and investing increase.
The Fed is raising interest rates to cool the economy and bring down inflation. It has raised rates three times this year. It has already started to affect stocks and commodities.
As central banks begin to raise interest rates, investors are moving away from risky assets. This has pushed prices of cryptocurrencies down.
The Fed has been particularly aggressive in raising interest rates. They have raised interest rates by a total of 0.75 percentage points this year. This is the largest increase in rates in over 20 years.
BTC Crypto deposits have gone bust partly due to the collapse of FTX
FTX is a major crypto exchange, allowing retail and institutional investors to trade in the digital currency token FTT. At one point, FTX was valued at $32 billion, making it one of the largest crypto exchanges in the world. It also had a strong institutional focus. This made it an attractive target for federal and state regulators.
As FTX’s fortunes fell, customers began to withdraw their deposits. This btc created a liquidity shortfall of $8 billion. In response, FTX filed for bankruptcy. Its collapse has taken a major toll on the overall value of the crypto market, reducing it from its $3 trillion peak. The crypto market now stands at $850 billion.
FTX’s collapse has made crypto investors very cautious about security. Many have started using hardware wallets to secure their digital assets. This has resulted in a significant increase in sales in recent weeks.
Expectation of hovering around $17,000 level
Traders are expecting to see the price of bitcoin hover around $17,000 at the end of this week. It has been a struggle for the coin to reach this level for more than two weeks. However, the trade set-up appears to be in favor of the bulls, despite the recent fallout from the collapse of FTX.
While the price of bitcoin has dropped nearly 20% over the past two weeks, the technical analysis suggests that there may be a short term bounce. If the price holds above the $16,500 support level, bulls may attempt to reclaim the $17,000 level. However, if BTC fails to break above this level, the bears will likely restrict the rally.
The price of bitcoin has been trading between $16,500 and $17,000 for most of the past week. The price has not surpassed the $17,500 level since June 21. However, it is still possible for the coin to break above this level, albeit gradually.
