Despite the current strength of the U.S. Dollar (USD), Bitcoin (BTC) was able to stay above $20,000, one of Bitcoin’s most important psychological levels. It is worth taking into account that the largest digital asset in the world was traded below $20k a few weeks ago. Therefore, this is a very significant thing for BTC, which shows strength among falling assets and currencies.
Bitcoin Stays Above $20,000
Bitcoin continues to be traded above $20,000 at a moment in which markets moved lower after the most recent FOMC meeting. Despite the fact that Bitcoin and other digital assets moved lower in recent hours, it was not possible for bears to bring Bitcoin down to the $19,000 price region.
The Federal Reserve (FED) and other central banks around the world like the European Central Bank (ECB) or the Bank of England (BoE) continue to raise interest rates amid one of the largest inflation crises in the last 50 years.
Another thing that we should consider about Bitcoin is that volatility has been lower in recent months. In the last 90 days, Bitcoin has been traded most of the time between $18,500 and $22,000. A few times in the past BTC has been traded in so tight ranges for a long period of time.
Analysts are now wondering whether Bitcoin has reached a bottom and it would start moving higher or if the bear market will continue in the near future. Bitcoin could see new lows before starting a new bull run, especially if the worldwide economy enters a recession or markets tank.
In 2021 and 2022, Bitcoin was very correlated with traditional financial markets. However, in recent months, this correlation decreased. Therefore, we should follow what could happen with Bitcoin in the coming weeks as markets might move lower if inflation data remains high and central banks fail at controlling it.
As we mentioned at UseTheBitcoin on Nov. 2nd, Litecoin took the lead in the crypto industry by surging above 10% in just some hours as the digital currency expands. This gives opportunities to traders that want to get trading opportunities during bear markets. At the same time, Dogecoin also moved higher when Elon Musk took over Twitter last week.
According to data shared by CoinGecko, Bitcoin is currently being traded at $20,240 and it has a market capitalization of $388 billion. The market capitalization of the whole crypto market fell by 0.1% to $1.05 trillion. It is worth taking into account that in the past hour, digital assets have not registered gains or losses, meaning that the closure of traditional markets has been very smooth for most cryptocurrencies.
It will be important to follow the trend of the crypto market in the coming weeks and months and whether there will be a new bull market that could push Bitcoin to previous highs or above $25,000. One thing is clear, this bull market could start as soon as the FED changes its stance from hawkish to dovish.