Will Bitcoin Mirror the Move?

Gold and silver prices experienced a powerful bounce-back on Tuesday, following a tumultuous period marked by a significant selloff. After suffering major losses in recent days, the precious metals staged an impressive recovery.  Will the Bitcoin price follow the recovery?

Both prices shot up, with gold increasing by 7% and silver by 13% in a day. The sudden increase in the prices has restored investor confidence and dragged world stocks and funds invested in these metals back into the positive.

Gold is now trading at 4,913.97 an ounce, and silver has recovered to 86.89 an ounce, regaining its lost ground after a drastic drop that took both metals to multi-week lows. Gold was down nearly 10% on Friday, and silver was down 30%, which was the worst in over 40 years.

Nevertheless, purchasing moved back on Tuesday due to investors taking the chance to purchase the metals at more favorable rates

Gold and Silver Prices: A Rebound Amid Market Uncertainty

The sharp reversal in gold and silver prices followed a period of heavy market volatility. The reason was the news that Kevin Warsh was nominated as the new chair of the U.S. Federal Reserve, which was a contributing factor to the downturn.

His possible appointment was a cause of fear of stricter financial conditions, and people feared that interest rates would rise. This uncertainty put strain on prices of precious metals, especially with margin increases by CME Group, leading to forced selling in futures markets.

Nevertheless, Gold and Silver remained strong. Gold recorded its biggest monthly increase in a decade, increasing by 13% in January, and silver surged by 19%. However, both metals were able to recover some of their losses on Tuesday, supported by the reappearance of buying power.

Spot silver reached $81.61 per ounce, still below its record high of $121.64 set last Thursday, but significantly higher than the lows it had touched in recent days.

Will Bitcoin Price Recover After Recent Decline?

As gold and silver reconsider their position, the cryptocurrency market is recovering as well. Bitcoin, which has been fluctuating in the recent past, gained 3% on Tuesday, but it stabilized at $78,000.

This is an increase following a significant fall of 12% in the past week, and many wonder whether Bitcoin will rebound further.

There is also a slight increase in the wider cryptocurrency market, which stands at $2.63 trillion. Mainly due to a relief rally following recent oversold conditions and favorable institutional implications. On Monday, Bitcoin exchange-traded funds (ETFs) received a large inflow amounting to $561.89 million, leading to a series of outflows that had been pressing the market over the past few days.

Technical analysts suggest that if Long-term Bitcoin forecast continues to show strength, it may push towards the critical $80,000 level. A consolidated rise above this could see a further rise to $90,600.

A failure to sustain momentum, however, may lead to a further decline with pressure at about $73,000.