In a daily note given to crypto news outlet CoinDesk, Alex Kuptsikevich, market analyst at online Forex brokerage FxPro, said the crypto sector would need banking problems or uncertainty surrounding the funding of governments as a catalyst to generate a “sustainable growth momentum”.
He pointed out that when the U.S. dollar started to make gains over the month, there was an increase in cryptocurrency investment, while the equity markets started to feel the most under pressure. However, this momentum did not last long and ended up being a “bull trap”, said Kuptsikevich. He stated that the mini bull run offers the best opportunity to sell while crypto is on the upside.
He noted that recent trends in the bond market show that financial chaos is necessary for Bitcoin and other cryptocurrencies to grow.
Crypto Markets Anticipate Bull Run As Government Shutdown Looms Large In The U.S
The crypto market is currently on the rise as traders are bullish on the prospect that the U.S. government might have to be shut down due to Congress failing to reach an agreement regarding its spending budget for the next fiscal year.
The price of Bitcoin has risen 2% in the past 24 hours to cross the $27,000 mark, finally moving out of the $26,000 range it has been tracking since the tail end of July.
An analyst at digital asset investment firm CoinShares, the apex cryptocurrency sits at a nine-day high despite large-scale equity weakness observed across most market sectors. He says the latest rally was necessary for BTC to reclaim the vital push-and-pull level at $27,000.According to Luke Nolan
Nolan highlighted that some investors view the possibility of a government shutdown as bullish for the cryptocurrency market because the event would play directly into the belief that sovereign currencies like crypto are not affected by governmental procedures. He added that the shutdown is a “large-scale reflection” of the dysfunction of due process by governments, which is the philosophical narrative of crypto assets.
Since the summer, Bitcoin has suffered from historic low volatility and trading volumes mainly because of holders maintaining their positions in the hope of a probable bull run and investors not buying into the digital currency due to a cumbersome economy. Normally, such an event would prove to be a long-term disadvantage, but coincidently, the recent stock market slide has kept BTC prices afloat.
While the Dow Jones Industrial Average and S&P 500 are on track to end a horrific month on a high note, Bitcoin is poised to rise in September for the time in seven years.
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Bitcoin Suffered Last Time The U.S. Government Flirted With A Shutdown
Indeed, a U.S. government shutdown – which could happen this weekend – could be a blessing for Bitcoin and crypto markets but there are also risks associated with the event. In May, when the echoes of the government were debating whether or not to raise its debt ceiling, BTC suffered. This is because a shutdown would drain liquidity from money markets as investors would start jumping ship to hard assets that are a safer bet against inflation.
The event would put Bitcoin’s claim as a hedge against inflation to the real test.
At the time of writing, Bitcoin (BTC) was trading at $26,967 – up 1.9% in the last 24 hours.
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