According to Bloomberg, the number one cryptocurrency is now facing a turning point. The main digital asset is recovering after a recent sell-off and a challenging time in the crypto market. On Wednesday, May 5, bitcoin was trading above its average value recorded over the past 100 days. Given other relevant factors, analysts at Bloomberg assume that bitcoin is approaching a make-or-break price barrier. According to forecasts, if BTC fails to overcome its 50-day moving average that is now located at $57,000, it will enter a high-volatility phase. This may be not an easy task for bitcoin as all its previous attempts to break through this level were unsuccessful. In recent days, the digital asset has been very unstable. Thus, it reached its peak level of $64,000 in mid-April but then plunged by more than 15%. Later, BTC recovered slightly on positive comments from Tesla’s CFO who stressed the importance of the cryptocurrency for the company. David Tawil, president of ProChain Capital, explains that a rapid fall in bitcoin was rather unexpected, but its further rebound means great prospect for BTC and shows “real power to the token, the staying power to the asset class.” Today, bitcoin is 511% up compared to the previous year even despite recent turbulence. According to Quant Insight, a London-based analytics research firm that studies the relationship between assets and macro factors, inflation and monetary policy of central banks have been the main drivers for bitcoin. Bitcoin supporters promote the view that BTC can be used as a hedge against inflation and an asset to store wealth. Yet, many analysts doubt its safe-haven function but give now weighty arguments against this.
