Bitcoin and the crypto revolution has been met with mixed feelings of euphoria and sadness. This is justifiable because of the many scandals, success stories, instant millionaires/billionaires, fraud, and money laundering and now constant government regulation and adoption. Additionally, crypto exchange crashes have alot of investors and speculators in awe. Is Bitcoin and cryptocurrency really a stable or predictable asset class?
A couple of days ago, Elon musk was backing doge coin as a result Bitcoin rallied about $300 in a day. On the other hand FtX crypto exchange crash in the final quarter of 2022 scared a lot of investors into hitting Bitcoin prices to drop to it’s lowest price to $16,441 in November 2022 from a high of $64,000 in 2021. On 5th April 2023 it was at $28,175, which is still lower than the about $40, 000 from April 2022. There is a common saying in the traders hand book “prices fall faster than the rise” this is a testimony to that. With a financial and economic crisis at hand, the bank runs and bail outs at play in Switzerland, Germany and the United States are a mere evidence. No Government Leader would want to ring the alarm and state the obvious.
We have identified an inverse relationship between the financial/economic crisis and Bitcoin movement.
Fundamental analysis
When the Bitcoin revolution began , there was talk about banks crashing and the dollar financial system (SWIFT) crashing. We all thought it was smoke and mirrors because it just sounded like that new smart pitch or pick up line to close the deal. Well it is now public knowledge and belief that the BRICS (Brazil, Russia, India, china, south Africa ) countries are literally MASTERMINDING the Greenback’s decline (endorsed by the desire for many countries to join).
The collapse of the big banks like Softbank and Credit Swiss is evidence to the crypto community and Bitcoin faithful that the financial system is going to dust. This has pushed investments into crypto assets especially with major bullish moves at the announcement of the collapse of banks and liquidity challenges.
Technically analysis.
Bitcoin prices seem to always rally or be bullish when financial system or Armageddon news breaks out. This is the case today, from the Organisation for Petroleum Exporting Countries CUTTING CRUDE OIL SUPPLY to Frances Emmanuel Macron stating Europe should reduce dependency on Europe has caused Bitcoin to regain some loses from last year’s quarter.
This is shown in Figure 1.
The opposite seems true, everytime the economy is doing well the crypto asset Bitcoin loses value with the move back to the accepted community and system of economics and finance.
Figure 2.
As we can see from figure 2 the recovery from the of economy beginning of 2022 to mid year so Bitcoin fall down to 40,000 and 20,000. But this year we are getting to see a sauce pan formation signalling a recovery.
Bitcoin experts and enthusiasts are aiming for a $150,000 Bitcoin price tag with a few Deeps to $60,000.