To date, Bitcoin has fully recouped losses earlier in the year.
Within the first 30 days of 2022, Bitcoin’s price fell from $47,733.40 to $35,070.10 and has been struggling to regain ground ever since.
But lately there have been some catalysts for upward mobility.
Last week, Treasury Secretary Janet Yellen said she still has “a bit of skepticism” about cryptocurrencies during an interview with CNBC, adding that payment system innovation can be a healthy thing. It has been so consistently negative towards cryptocurrencies that the comment measured was a significant shift.
There is also the compounding effect of bitcoin’s price hitting a milestone because that would mean the asset is out of the red for 2022.
The recent price action could be a sign that the fear, uncertainty, and doubt (often referred to by the acronym “FUD”) triggered by Russia’s invasion of Ukraine and COVID-19 are easing, according to Isaac Tebbs, CEO of CryptoBoost .
“There has been a shift in the macro environment, with many investors viewing Bitcoin as oversold in the $30,000 to $40,000 range,” he told Decrypt in an email. “This may be as Russia and COVID fears ease.”
Tebbs, who said his marketing firm works with many Terra-based DeFi projects, also pointed to the fact that Terraform Labs CEO Do Kown recently said he would be buying billions more Bitcoin to support the official wallet of the Terra Protocol to fund its TerraUSD (UST ) stablecoin.
However, it’s worth noting that it hasn’t actually happened yet. As of Monday afternoon, the balance in the wallet stood at $1.3 billion after Kwon said last week Terra had raised a total of $3 billion to establish the reserve and is aiming to raise a total of $10 billion .
Despite the positive price action, Pratik Gandhi, head of marketing at Covalent, said it was too early to celebrate an end to Bitcoin’s price turmoil. He will not consider the turmoil over until the price has held its current gains for at least another week.
“Most of the recent price action has been heavily influenced by overall macro market sentiment and stock tracking,” Gandhi told Decrypt. “The other factors contributing to these external forces are derivatives and whales involved in high volume trading.”
Although Bitcoin has often been cited as a safe haven where investors move their money when traditional markets plummet, it has followed traditional markets since stocks plummeted at the onset of COVID. In fact, the correlation between Bitcoin and the S&P 500 index just hit a 17-month high.
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