Bitcoin price is rising and trading only 5% below $30,000

Despite fears of a major banking crisis, bitcoin (BTC) and many other cryptocurrencies have risen sharply in price over the past few weeks. Yesterday the price crashed quite a bit, but now bitcoin has risen back to the level it was before that crash. There may be a number of reasons for this. At the time of writing, BTC is trading at a price of EUR 26,200 on Bitvavo.

Liquidations: too much leverage?

For many traders it is attractive to buy assets with leverage. This is where you invest in addition to your own money, also with money from the broker, so that you can quickly turn a small amount into a large amount. However, this entails quite a few risks. Because if the price does the opposite of what you expect, you get a so-called margin call and there is a chance that you will be forced to sell your position.

Looks like this was going on yesterday. According to CoinGlass $183 million in open long positions was closed yesterday, presumably a good portion of that at a loss. Bitcoin investors who expected the price to rise sold for nearly $90 million yesterday. The bitcoin price fell by almost 8% yesterday.

Bank crisis the cause: Bitcoin to $ 30,000?

The banking crisis that has dragged Silicon Valley Bank (SVB), Crédit Suisse and possibly many other companies into it seems to be one of the causes of the sharp rise in crypto over the past two weeks. After all, crypto must be an alternative to the current financial system.

Bloomberg spoke to analysts who think the rise is not quite over. Bitcoin would still be on its way to an important price target of USD 30,000. At the time of writing, the price is still about 5% away from that.

Bitcoin trading volume has not been this high in four months – FTX collapsed four months ago. However, Matt Maley of Milley Tabak Asset Management explains to the business newspaper that the crypto is quite overbought starts to hit. He thinks the price will not be able to break through $ 30,000 once the banking crisis eases.

SEC warns against crypto

A less positive message comes from the US Securities and Exchange Commission (SEC), which investors warns against the risks of crypto. Some tokens could be securities. This morning we wrote that Coinbase has received a warning from the SEC, apparently the policy maker thinks it is important that everyone is aware of the risks.

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