The latest crypto market data shows that the trading prices of both Bitcoin (BTC) and Ethereum (ETH) have recorded strong gains in the latest sessions.
The largest cryptocurrencies had been facing downtrends for some time. Finally, they were able to get rid of the downtrend and their prices started to move upward.
Due to the recent downtrends, the value of Bitcoin had declined below the $20,000 mark while Ethereum had declined below the $1,400 mark.
However, the situation became bullish on Saturday as the investors started to pour in more money to support these cryptocurrencies. Therefore, the trading prices of both assets were moved upwards.
The Dollar May Be Growing Weaker
Although crypto investors are glad to see the spikes in the respective crypto prices, there are explanations suggesting what might have made it happen.
According to the market observers, it is not because the positive factors have kicked in favor of these cryptocurrencies. It might be because of the weakening of the dollar that the trading prices of cryptocurrencies have been rising.
Due to the recent payroll data and the rising unemployment submissions, the dollar price has started to decline. Investors have not been investing in the dollar due to the unemployment rate in the country.
The labor data shared by the US Feds has revealed that the growth of wages has slowed down in the country. This goes to show that the pressures rising due to the inflation rates have started to tone down.
Given the recent developments, the Feds may announce a reduction in the hikes of interest rates. This could mean that the dollar price would not grow as stronger as it was growing previously.
This has resulted in the dollar price getting pulled lower and thus, the crypto market has started to experience a rebound.
Past Week Performance of Bitcoin
The data for Bitcoin suggests that the asset had experienced a downtrend throughout the past week. In the past week alone, the value of Bitcoin had dropped by 10.88%.
Due to the downtrend, the value of Bitcoin had declined from over the $24k mark to below $20k.
However, as the price of the asset has rebounded in the latest session, it is suggested that the trading price of BTC may be recovering.
It may be entering a bullish trend and as a result, the asset price may continue rising. Once again, it is the dollar that is helping Bitcoin grow in price and volatility.
Crypto Industry is concerned due to the SVB
The reason behind the decline in the trading price of Bitcoin and the rest of the cryptocurrency industry in the past week was the potential of Silvergate Bank going bankrupt.
The bank had communicated last week that it was facing a financial crisis and this week, it announced the liquidation of its business and assets.
Just when the crypto industry was in the middle of recovering from the crisis, another concerning news has come from another banking firm.
This time, it is Silicon Valley Bank that has revealed that it is facing a major financial crisis. It is another banking firm that is linked with the cryptocurrency industry.
If the SVB ends up filing for bankruptcy or goes through liquidation, things may become worse for the crypto industry.
Bitcoin Price Analysis
Looking at the current market developments, analysts have made negative/positive predictions about the BTC price.
The analysis suggests that the trading price of Bitcoin may enter a bearish zone if the SVB ends up liquidating or bankrupting.
In that case, the investors may start selling their holdings which may pull the trading price of Bitcoin to lower levels.
The strong support level for Bitcoin currently lies at $20,350 and the bulls are trying hard not to lose their footing. If the news is dire, then the support level may get broken, bringing the asset’s price lower to $18,430.
On the other hand, if Bitcoin is able to make it through the difficult times, the bulls may not take much time to rebound its price. They may invest heavily into the asset, pushing its price to a high of $25,000.