What happens at the cost of Bitcoin? It is enough to take a quick tour of the main Italian generalist newspapers to realize how agonizing the question has become, especially for those looking for easy click.
As always, however, a sensational cutfor the main purpose of scared enough the reader, and make him repeat a tired "I told you so". If there is anything unbelievable as it happened in last days it's actually the ability to bear the price of Bitcoin in the face of misfortunes that would have caused entire markets to explode.
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What happens to the Bitcoin price? Are we really in danger of collapse?
After a brief look under the 20 000 $ last Friday, Bitcoin it has regularly returned above this price level, despite the fact that the situation on the markets remains quite uncertain. Many, including some old watches that catch us repeating the same time at least twice a day, see this price drop as a kind of initial bet towards the death of $ BTC. It will not be so, and in this study we will try to understand together why.
All this not to give false hope to those who may be thinking of entering the market now, but only for the purpose of re-entering the market. Earthin a discussion which, in our opinion, takes on tones close to hallucination.
- Bitcoin is still correlated to risky assets
It is with those who are called Technical jargon la growth stocks. This has been evident for months and we have repeatedly pointed this out in our in-depth studies. Some took us for crazy, others fished with both hands by imposing it as a real story of their own, others, like the generalist newspapers, seem to have noticed it now.
The fact is that Bitcoin continues to behave like a kind of NASDAQ 100 leverage, both in health and in disease. And that it would be enough to look at how the shares of very solid companies behaved (and in which the same newspapers always advised investing until a few weeks ago) to have a proportion of the seriousness of the situation. A gravity of the situation to which, in the world of Bitcoinsome rather unique facts have been added.
The Terra Luna case and the incredible waterfall effect
Of the crisis and the crack of Lunar Earth the walls have also spoken now. Things, as we will see, have not stabilized yet but it is worth remembering the proportion of the crack and the chaos it unleashed in the market. Bitcoin.
USD was a stablecoin which, through a complex system of levers and mirrors was guaranteed mainly by $LUNA and secondly instead by a reserve which also included Bitcoin. The fact is that in the face of chain liquidations, to support the value of USD the group that controlled the ecosystem thought well of liquidating the huge amount of Bitcoin which he had.
Now imagine what can happen to a market already in general crisis if a significant amount of active are liquidated at highest bidder, in a market already reluctant to buy. Well, that's what happened on the first descent of Bitcoin under me 30 000 $price level, let's face it, unimaginable already in March.
Such a liquidation triggered other problems
The world of decentralized finance it was widely exposed straight towards Lunar Earth in the sense that many had significant capital within Anchora protocol that offered yields close to 20%, allowing the lever of the lever of the lever. The total liquidation of Lunar Earth therefore burned huge amounts of capital in the blink of an eye, often single-handedly, what was in the availability of funds and automatic annuity on cryptos.
A sort of contagion effect whose proportions are still largely unknown, and which is slowly taking shape. For those who come from the world of traditional finance, it would be like witnessing a total liquidation of the assets in possession of Black rock. Without the possibility of parachute or reimbursement for those who had given their capital to this company. What would become of world stock exchanges?
There are no bearings and there are no central banks
When in the 2008 the collapse of Lehman Brothers confront everyone with the harsh truth of inflated and bubbled markets, the interventions of central banks and the gods governments they mitigated, at least in part, the cascading effect. This is not possible in the crypto world, by choice and by spirit and also by the attitude of central banks.
And so the decline of Bitcoin at high altitude 20 000 $ it must also be read taking into account the absence of entities with almost infinite liquidity able to buy toxic assets and to neutralize collapses. Who is not one solution to the problembut only a kick in the can forward avoiding the implosion (the can that finally seems to be back on our feet in 2022).
The fact is that Bitcoin could not benefit from this tampon either. No third party with the mint in hand intervened. Bitcoin, and we love it, had to find support on its own in the markets.
Jerome Powell doesn't know what to fish for and adds nervousness
Markets, not just crypto, are all dreaming of the arrival of a Jerome Powell de fed dressed by magician and able to carry all the nervousness, all the hypochondria, on the shoulders of the institution, as a famous song would say.
Rather, the most likely reality is a Jerome Powell on the pirate deck, inflation pushing it into the water and recession waiting for the plunge. A very restricted space in which to move and which would require considerable sleight of hand, not even for the magicians of the fantastic movie. And in such a situation, again, expect sparks of Bitcoin that would be ungenerous. But all is broth for the press now addicted to someone's sensationalism and desperate Click on make ends meet.
Push yourself: Bitcoin is here to stay
Despite the constant Chinese attacksdespite the curious axis that has formed between the central banks of the whole world, from those of free countries to those of the most awful dictatorships, despite the arrows of the financial saurs of Wall Streetthose who really matter, Bitcoin is here to stay.
And it won't be a temporary price drop, however significant, to decree its death. Whoever has prepared an umpteenth funeral (among other things always the same newspapers) will have to bring coffins and wreaths again this time.