The recent slump in the value of Bitcoin has been disheartening to many investors. However, there are three catalysts that could potentially reverse the downward trend.
The crypto market was rocked this week as the Bitcoin price plummeted in tandem with a decline in the S&P 500. The US Dollar surged to its highest value since the first week of 2023.
Additionally, this was further compounded by news that came out last week that the People’s Bank of China injected $73 billion into its banking system in an effort to increase liquidity. However, if Bitcoin were to break away from its correlation with equities, it could potentially wipe out all of its losses from the past week and continue on an upward trajectory.
The price of Bitcoin has remained closely linked to the performance of US equities. However, this dynamic was clearly demonstrated on Friday when the cryptocurrency declined in response to a strengthening US Dollar.
Factors that would influence the price of BTC
Further analysis reveals that three key factors are currently influencing the price of BTC. China’s recent injection of liquidity into its economy.The continuing correlation between Bitcoin and US equities, and macroeconomic indicators such as important inflation statistics. In particular, any changes in inflation rates are seen as having a direct impact on the value of Bitcoin.
Finally, governments around the world need to take a more hands-on approach by providing clearer regulations. The regulations address issues such as taxation and anti-money laundering measures.
If these three catalysts can be successfully implemented, they could help turn things around for Bitcoin’s long-term success.
