Bitcoin (BTC) and Ethereum (ETH) managed to stop their downtrend and saw their value rise above $20,000 and $1,400, respectively, early Saturday morning. However, the surge can be attributed to a weaker US dollar, which turned negative after February’s labor data showed a slowdown in wage growth, pointing to easing inflationary pressures.
The statement noted that if the Federal Reserve slows the pace of interest rate hikes, it could potentially make the US dollar less attractive, leading to increased demand and higher prices for cryptocurrencies.
It is important to emphasize that the cryptocurrency market is known for its high volatility with frequent price fluctuations. Bitcoin and Ethereum saw significant losses last week, with BTC down 10.88% and ETH down 10.94% of its value.
The losses suffered by Bitcoin and Ethereum saw the global cryptocurrency market capitalization drop below $900 billion to reach $890 billion. However, there are signs that the decline may be slowing, and BTC is showing potential to recover some of its lost ground.
The reversal can be attributed to a weaker US dollar and the latest weaker-than-expected US jobs data. It is important to note that the cryptocurrency market is very volatile and price fluctuations are expected.
Silicon Valley Bank’s liquidity crisis raises concerns about cryptocurrencies
Silicon Valley Bank, an important financial institution for venture capital firms, is facing a liquidity crunch, according to recent reports. The event raised concerns about potential broader financial implications, which would drive down the value of cryptocurrencies.
It is important to note that Silicon Valley Bank is a large financial institution used by many venture capital firms, which may have an indirect effect on the cryptocurrency market. While this isn’t a direct hit on the cryptocurrency sector, it does highlight how interconnected the financial world can be, with events in one area potentially affecting another.
As a result, the news about Silicon Valley Bank’s liquidity problems negatively affected the crypto market.
A weaker dollar supports the crypto market
The US dollar, which was in an upward rally, could not maintain its momentum and weakened for the day. This was due to the latest labor data for February, which showed a slowdown in wage growth, suggesting a possible easing of inflationary pressures.
This could lead to the Federal Reserve maintaining a moderate pace of interest rate hikes, thereby reducing the attractiveness of the dollar.
Although the US economy added jobs quickly in February, slowing wage growth and rising unemployment dampened expectations for a 50 basis point interest rate hike at the Federal Reserve’s upcoming meeting.
The crypto market has faced significant losses over the past week, with both Bitcoin and Ethereum losing nearly 11% of their value. However, the decline began to fade as the US dollar weakened, forcing BTC to recover some of its lost ground.
Cryptocurrency and USD market performance remain uncertain in the coming weeks due to the ongoing pandemic and recent market volatility. The focus is now on the CPI print and general financial conditions, given recent developments in the US banking sector.
Peter Schiff advises selling BTC for gold in the market
Peter Schiff, a well-known cryptocurrency critic, recently advised investors to sell their Bitcoin (BTC) and invest in gold as the cryptocurrency market continues to experience losses. Schiff, who has long been an outspoken bitcoin skeptic, predicted that the industry will face more bankruptcies, which could further depress the market.
Schiff’s statement came in response to the recent stock market crash of Silvergate Bank, which had a significant impact on Bitcoin and other cryptocurrencies. While some investors may disagree with Schiff’s view, some crypto enthusiasts remain optimistic about the industry’s future.
For example, Schiff’s son, Spencer Schiff, disputed his father’s post, saying that while blockchain companies and other cryptocurrencies may crash, Bitcoin will stay afloat as a lifeboat.
Bitcoin price
Bitcoin technical analysis indicates a significant bearish trend for the BTC/USD pair as it broke through the double bottom support level at $20,350. The immediate support level for Bitcoin is $18,430.
If this level is breached, it could increase selling pressure, leading to a further decline towards the $16,400 level.
On the other hand, the first hurdle for Bitcoin is at the $20,300 resistance level. If Bitcoin breaks above this level, it could trigger buyer pressure and potentially push its price towards the $21,400 level.
If the bullish momentum continues, there is a chance that Bitcoin could even reach the $25,000 mark.
