These events will drive the Bitcoin price this week
- Bitcoin price is set for a strong rally this week amid key economic data to be released.
- The digital currency is estimated to touch $100,000, but what is the probability?
Bitcoin (BTC), the world’s largest digital currency by market capitalization, has seen a sharp suppression of the combined crypto market capitalization stemming from its bearish price decline. At the time of writing, Bitcoin is worth $28,502.95, down 2.56 percent in the last 24 hours. While week-to-date (WTD) growth remains positive above 4 percent, today’s gloom masks the propensity for growth this week and by extension this month.
Despite trading below the psychologically important $30,000 level, Bitcoin has maintained relatively promising resilience above the key $28,000 support level. As the representative asset in the emerging digital currency ecosystem, BTC is known to maintain a very close correlation with some core indices in the mainstream financial ecosystem.
Some of these indices include the S&P 500 Index and the Nasdaq 100 respectively. The sheer stability Bitcoin has experienced so far can be attributed to its correlation with these indices amid promising performance reports from top US tech giants including Meta Platforms, Apple Inc and Amazon.com Inc to mention a few.
The collapse of some of the major banks in the US also served as a cue that helped shoot the correlation between BTC and gold to a 2-year high. These assets became the haven for most investors as uncertainty around legacy banking grew.
While the industry appears to be regaining its balance with the news that JPMorgan Chase and Co. will acquire First Republic Bank, there are some important events planned for the rest of this week may have an underlying impact on the price of the premier digital currency.
Bitcoin outlook amid expected economic data from around the world
From Tuesday 2 May, inflation data from the European Central Bank (ECB) will be published. A day after, the US central bank is billed to reveal its recent interest rate decision.
Inflation has slowed down following consistent efforts by these top banks through targeted increases. Despite this decline, inflation remains above the forecast range in all key regions. With continuous interest rate increases, fears of financial contraction may grow, fuel more Silicon Valley Bank and Silvergate Bank-style crises.
The expected decisions will have a major underlying influence on how market investors embrace risky assets like Bitcoin. Regardless of the central banks’ position on interest rate increases, Bitcoin is billed as beneficial in the long run. Should there be a relief, it will mean the start of large cash flows into the industry.
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With a lot of cash, the purchasing power and value of the US dollar or euro will decrease, thus giving the likes of gold and bitcoin a basis that can be used as a hedge against inflation with a positive impact on price gains in the long term.
While the events ahead could help drive a renewed Bitcoin rally, Bitcoin is poised to end the second quarter around $40,000 rather than some of the overly optimistic false projections pegged at around $100,000.
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