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Bitcoin Bounces Back

After A Wild Ride Stocks Take A Breather And Bitcoin Bounces Back

With the return of relative stability to traditional financial markets on Tuesday, the digital currency market has also stabilized somewhat. Most digital currencies have risen in value over the past 24 hours. Bitcoin prices fluctuate in the $5000 to $5500 range, according to Coindesk. This is the range that bitcoin fluctuated before the Fed cut interest rates.

At the moment, bitcoin is trading at $5250, up 6% from the last 24hours. Meanwhile, Japan’s Nikkei has experienced modest growth of 0.06% in its last trading day.

Japan’s overall Nikkei index
The Japanese Stock Exchange seems to be a good indicator of bitcoin’s performance in the few hours after its opening. In spite of the apparent downturn in key indices of the Japanese stock market, bitcoin is experiencing similar price movements when the good fluctuates in a limited range. It is clear that many other markets have at least similar performance for now.

Japan's overall Nikkei index
Bitcoin price chart
Denis Vinokourov, head of Bequant Research Center, a digital currency company, says:

This is not the first time Bitcoin has shown solidarity with other assets. It also happened during the trade war between China and the United States, as well as the military tensions between Iran and the United States. But at that point, solidarity was rapidly disappearing.

One of the parameters for evaluating the digital currency market is the bitcoin ratio to the market value of bitcoin (MVRV), which fell below zero on Friday, indicating that the current price is lower than the real bitcoin value. Some traders see recent price fluctuations as a natural investment by some market players who are buying from others.

Henrik Kugelburg, the international digital currency trader, says:

Weak actors leave the market and those who truly believe in the industry are buying.

In fact, most traders believe that corporate investors are selling bitcoin, but small investors see the market situation as a discount to buy more.

After it was determined that the Fed’s interest rate cuts would not have a rapid impact on the market, the Trump administration took further measures to prevent the economic downturn, which pushed the S&P500 index down by 4%.

The price of gold has also risen by less than 1% in the last 24 hours. The price of the precious metal is an indicator to gauge markets ‘ reactions to interest rate cuts and other governments’ efforts to tackle the crisis.

Gold price chart

Rupert Douglas, head of sales at Koine, says:

It is very scary to see the Fed rate cut to zero and to see the market reaction to it. The price of gold can usually go up.

Despite the intense fear and excitement, traders need to focus on what they do and keep calm and use the tools available to counter price fluctuations.

Douglas went on to say:

If you narrow the range of losses, you can take great risks from the market with low risk.

In addition to bitcoin, other digital currencies have also seen good growth in the last 24 hours. Lisk (LSK), IOTA and Satoshi Vision, for example, have gained 11%, 6%, and 6% respectively.

 

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