Leading cryptocurrency Bitcoin has recovered along with global stock markets after its unprecedented decline.
Japan's major index, the Nikkei 225, also rose sharply today after suffering its biggest price drop since the late '90s on Monday.
However, experts think that Bitcoin's recent recovery depends on macroeconomic conditions and the rise may not continue unless macro conditions improve.
Speaking to Bloomberg, Arbelos Markets trading director Sean McNulty said investors increased their buying activity in the sharp decline, but overall market sentiment remains cautious due to fears of a potentially larger deleveraging and downturn.
According to McNulty, cryptocurrency investors are skeptical of Bitcoin's recovery from its recent decline and believe that this recovery is not sustainable unless there is a significant improvement in the global economic landscape and a reduction in Middle East tensions.
The Rise in Bitcoin May Be Limited!
Another analyst also said that the recovery in Bitcoin and cryptocurrencies may be limited and depends on stock market performance.
Speaking to Coindesk, Ruslan Lienkha, Market Chief of cryptocurrency exchange YouHodler, said that there may be a short recovery after the last market decline, but this recovery will probably be limited due to the pessimistic feeling prevailing in the market.
Lienkha stated that the recent decline in BTC was due to external factors rather than negative news or charts in the crypto market.
“The recent decline in Bitcoin was due to external factors, not problems in crypto. The recovery will occur in the same way.
In other words, the recovery in BTC and crypto depends on the recovery of stock markets and global markets.
However, there is not enough data yet to call it a bear market in Bitcoin.
“Investors should monitor stock markets more closely throughout August.”
*This is not investment advice.
