How to benefit from Bitcoin volatility with market analysis and trading bots
Trading Bitcoin (BTC) is not easy, given the relatively high volatility of the cryptocurrency, its low correlation to other asset classes, and its reaction to various factors that can come from both the crypto industry and traditional finance.
Like the U.S. dollar and other fiat currencies, which are mostly driven by macroeconomic factors, cryptocurrencies like Bitcoin can become volatile when the Federal Reserve surprises with its interest rate decision. However, Bitcoin can also react to the collapse of a major crypto exchange like FTX. Therefore, it’s difficult to predict where the next big trigger may come from, which is why Bitcoin traders should pay closer attention to market analysis on all fronts.
In 2023, Bitcoin experienced a period of recovery, with the price starting the year near $16,500 and peaking in mid-April above $31,000 to reach its highest level since the beginning of June 2022.
Source: TradingView
The recent banking crisis has helped Bitcoin, with mid-sized banks like Silvergate, Signature and Silicon Valley Bank failing within days of each other in March this year. Expectations that the Fed will continue to raise rates at a slow pace have provided additional bullish support.
The largest cryptocurrency by market capitalization has seen some correction in May amid regulatory uncertainty and ongoing concerns that the U.S. debt ceiling negotiations could fail and lead to a default.
Still, crypto believers expect systemic risks to push Bitcoin to new highs this year. For example, U.S. venture capitalist Balaji Srinivasan even bet $1 million that BTC would exceed $1 million by June this year. He said that hyperinflation would hit the U.S. dollar, causing the USD value of a Bitcoin to skyrocket.
While the $1
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