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Bitcoin shows strong gains but asset’s future remains unpredictable

Relevance up to 09:00 2022-03-22 UTC–4

Last week, Bitcoin increased by more than 6%, closing on Friday at $41,300. At the same time, the asset has shown the best performance since the beginning of February. At the time of writing, Bitcoin is trading at $41,320.

Leading altcoins followed Bitcoin’s trend. Thus, Ethereum soared by 11.4%, XRP gained 2.3%, and Avalanche grew by 21.4%.

According to CoinGecko, the world’s largest aggregator of digital asset data, the total capitalization of the crypto market increased by 7.7% to $1.95 trillion over the week.

At the same time, Bitcoin’s Fear and Greed Index soared by 10 points to 31 points.

Since early March, the flagship cryptocurrency has declined by 6%. Bitcoin has been in a sideways range from $37,000 to $42,000 for almost the whole month. At the same time, the last seven days turned out to be surprisingly successful for BTC. The asset has shown maximum growth for the last six weeks. The main reason for such growth was the two-day meeting of the US Federal Reserve held the day before.

As a result of the meeting, the US regulator raised its key interest rate by 25 basis points for the first time in four years. According to the results of the March meeting the rate range is now 0.25-0.5%.

The Fed’s decision significantly weakened the US dollar and strengthened key stock indices, which had a positive effect on all risky assets, including digital assets. Thus, after the Fed meeting, the key stock index S&P 500 instantly jumped by 2.24%, Dow Jones gained 1.55%, and NASDAQ Composite rose by 3.77%.

The unpredictable trading of Bitcoin makes experts confirm its unpredictable future. Yesterday, the CEO of virtual asset management company Galaxy Digital Mike Novogratz shared a new scenario, according to which in 2022 BTC will trade in a sideways channel and will not show strong growth.

Novogratz cited Fed Chairman Jerome Powell’s statement about further plans to raise interest rates as the main argument for his opinion.

In addition, the millionaire called Bitcoin a great alternative to fiat money and a hedging instrument against inflation. At the same time, Novogratz noted that cryptocurrency would be considered by investors not as a means of payment, but as a “store of value”.

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