BTC has been outperforming the stock market for over a month now. Many experts, even from domains not associated with crypto in the least, are talking about the potential use of cryptocurrencies as hedging mechanisms against inflation and the global recession. Vitalik Buterin said in one of his interviews before the merge that crypto will be more stable than traditional storage of value like gold or silver.
This week started quite well for BTC enthusiasts. As of the time of writing, BTC managed to breach the $20K resistance level. While price retracement is possible, it is a good sign for the market.
Foreign partners are pressuring the US to stop rate hikes
The situation in the global economy is worse than it was before the 208 financial crisis that devastated many businesses and individuals. This time, we see the same symptoms with increased borrowing, uncontrolled spending, and more. It seems that we are inching close to a massive recession each month. One of the answers from the US government was to raise rates which created a huge disparity in the Forex market leading to a significant weakening of multiple fiat currencies.
While other factors are undeniable and are at play here, we have to think that Bitcoin is reacting primarily to the instability in the foreign exchange domain. With the British Pound, Euro, and Chinese Yuan losing positions and the US dollar attracting more investors to the US bond market, the situation is simply way too uncertain. Some investors are looking at BTC as the best bet.
Bitcoin has been hovering above the $19K support level for a while. The bulls defended several support lines over the week. The asset even breached through the $20Kline on September 27. Now, the movement seems more confident.
We do not have any dramatic shifts in the market
The global economy does not have any drastic developments at the moment. BTC traders are not overreacting to a news story. It seems that the market is ready for a recovery. While we are still far away from a true Bull Run, it is a good indication that BTC can hold on to its current position.
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