Bitcoin was created as a form of independent currency that would not have to depend on the traditional financial market to dictate its value.BTC deviated from the same a while ago as it followed the stock market’s lead, but following the recent crashes, the cryptocurrency seems to be back on its own.Why capitulation is called on Bitcoin price Bitcoin price trading at $28,346 is inching closer to the $30,000 mark, which is a crucial psychological resistance level.Investors have been expecting BTC to be at this mark by the next month.However, some analysts are looking at the cryptocurrency heading in the opposite direction, potentially even crashing by 45%.Capriltulation.— il Capo Of Crypto (@CryptoCapo_) [pic.twitter.com/IAlTCvkiqC] [March 29, 2023] Analyst Capo of Crypto suggested that April would see Bitcoin price falling to as low as $16,000 and below.When asked for the logic behind this forecast, the analyst stated that the worsening macroeconomic conditions would bear some significant impact on the price.
Calling the recent BTC rally a dead cat bounce, Capo of Crypto further noted, “The main reason for this bounce from the lows is a liquidity gap formed after the FTX crash that has been filled thanks to an initial bounce with from BUSD + USDC mint and the squeeze of late shorts, plus traditional markets recovering too.Smart money is not buying.Bitcoin is not a hedge against inflation or disasters yet, that’s why when the stock market enters a bear market, BTC does too (2022), and also the reason why it crashes during black swan events like the 2020 one (Covid crash).
The recent statements from Federal Reserve Chair, Jerome Powell, indicating higher interest rates hike already suggest that the TradFi market could be seeing some bearish effects going forward.Furthermore, Russia recently announced that it would be favoring the use of the Chinese Yuan for settlements between Russia and the countries of Asia, Africa and Latin America.The de-dollarization would significantly impact the US markets.However, Bitcoin price is safe from facing the likely adverse effects on the US markets.
Capitulation unlikely for BTC This is because the recent rally made it pretty evident that the biggest cryptocurrency in the world is no longer correlated to the US stock markets.Regaining its label of being a safe haven just like Gold , Bitcoin price stands far from capitulation.
This is evident on the Net Unrealised Profit Loss (NUPL) indicator as well, which recently recovered from the capitulation zone after nearly four months at the beginning of this year.Rising since then, Bitcoin price currently stands in the Optimism zone suggesting unrealized profits are dominating the market.Bitcoin NUPL However, if institutional investors make any sudden move due to worsening macroeconomic conditions, Bitcoin price and the crypto market as a whole could take a hit.Although even in such a situation, BTC is expected to stay above $20,000.
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