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All major cryptocurrencies, including Bitcoin and Ethereum, experienced a steep decline in 2022, following the collapse of several prominent projects, numerous bankruptcies, liquidity challenges, and the downfall of FTX. Both Bitcoin and Ethereum were almost 65% down from their all-time highs by the end of last year.
Nonetheless, there has been a slight improvement in their performance since the beginning of this year.
At the dawn of 2023, Bitcoin was spotted fluctuating within the $16,000 to $17,000 range. However, the digital currency skyrocketed to almost $24,000 by the end of January and surged toward new heights of over $25,000 in February. Earlier days of March saw Bitcoin retreat below the $20,000 mark but the coin has since regained its momentum, reaching the $28,000 levels in March.
On the other hand, Ethereum was trading around the $1200 mark at the commencement of 2023; however, it soon crossed the $1,500 level by the end of January. Since then, Ethereum’s been fluctuating up and down, but it has largely remained range bound in the $1,500 - $1,855 zone.
Amidst such uncertain circumstances, several brokers such as InvestOFund offer their trading participants the opportunity to benefit from both market directions via CFDs. Bitcoin and Ethereum CFDs can potentially enable traders to capture rapid price fluctuations; however, it is important to approach them with care and caution.
Bitcoin and Ethereum prices rally to the highest levels since June 2022 despite several headwinds
Bitcoin's value touched the nine-month peak of $26,490 in mid-March, exhibiting a remarkable surge of over 30% in just four days, defying the turmoil in worldwide financial markets.
This recent surge in Bitcoin's value has caught many off guard, especially considering the closure of two of the most prominent lenders to the crypto industry, Silvergate Capital and Signature Bank. Moreover, despite the failure of Silicon Valley Bank, which is considered the bedrock of the tech startup industry, Bitcoin has experienced an impressive 50% gain in value this year.
Similarly, Ethereum has also rebounded and reclaimed support at $1,600. It is currently in a range around the resistance level of $1,800, indicating a bullish outlook for the future of Ethereum. The currency is currently up more than 38% year-to-date.
However, it is worth mentioning that despite undergoing its most substantial upgrade in September 2022, the price of Ether has failed to surge in the last six months as experts anticipated. In fact, Ether has continuously declined in value by 10% against Bitcoin from mid-September 2022 to mid-March 2023.
Which potential factors are driving the prices higher?
The current bullish sentiment in the crypto market is spurred by a variety of possible factors.
Firstly, US authorities' recent move to limit the repercussions of Silicon Valley Bank's collapse has given a boost to major cryptocurrencies. The government's intervention to secure all customer deposits for SVB and Signature bank has instilled a sense of assurance, igniting a minor upsurge in the crypto markets. This measure has also helped stabilize the popular USDC stablecoin, which is crucial to digital token trading, and had $3.3 billion in deposits at SVB.
Secondly, the recently released US consumer price data indicated inflation was still increasing, albeit at a much slower rate than the previous month. This highly anticipated CPI reading could lead the Federal Reserve to either slow down or pause its interest rate hikes in the future. This sense of expectation is substantially contributing to the surge in the crypto market.
Another development that may have fuelled the spike is Binance’s decision to convert its $1 billion industry recovery fund into tokens, including bitcoin, as reported by London-based crypto firm BCB Group.
Ultimately, as the crypto markets are prone to swift reversals, traders must be prudent and may opt for CFDs as a countermeasure. InvestOFund is a trusted trading broker that provides crypto CFDs, allowing clients to conveniently achieve their financial goals.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.