Bitcoin Price on an Uptrend as Cryptos Rebound From Selloff

The price of Bitcoin (BTC) on Tuesday rose as crypto assets rebounded from the recent selloff. However, most cryptos continued on a downtrend because of the macroeconomic environment, such as the rising bond yields. 

Bitcoin Price Back to USD 40,000 Level, Altcoins Gain Marginally

On Tuesday, the price of BTC rose by 4% and almost hit the USD 41,000 mark after dropping to USD 39,000 last week. According to a team of analysts at Bitfinex, traders are waiting on the sidelines amid the reducing volume.

Ether was also on an uptrend, increasing by 4.5% to surpass the USD 3,000 mark. Last week, Ether dropped below USD 2,900. 

Smaller cryptos or altcoins followed the same trend depicted by Bitcoin and Ether. One of the biggest gainers was LUNA, which soared by 17% after hitting the lowest point in February. Cardano and Solana were up by about 5%. Shiba INU and Dogecoin gained 4% and 3%, respectively. 

Bitcoin, Crypto Assets Impacted by Macro Trends 

Crypto assets have come under sharp pressure from macro trends in the global market. Investors are looking at aggressive shifts by the Federal Reserve, which is expected to raise interest rates a number of times this year to counter inflation.

Although cryptos are expected to trade independently from the mainstream markets, the truth is that they are related to risk-sensitive assets, such as stocks

If the Fed pushes up interest rates and raises the cost of borrowing, the economic demand is likely to get dented. This could push investors to riskier assets, such as cryptos.

A rise in bond yields pushes down the extra returns that investors expect to scoop between the bonds (which are considered safer) and the riskier options such as digital assets and equities. The return on a 10-year US Treasury note reached 2.9% on Tuesday after closing at 2.87% on Monday.

According to the team of experts at Bitfinex, investors are very concerned about the dangerous combination of the slowing growth and rising inflation. This, coupled with growing levels of private debts, rose during the COVID-19 pandemic and resulted in a huge impact on asset valuation.

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