Key Insights:
- As per the latest crypto news, China banned digital assets but has been hoarding gold and could soon surpass the US.
- Bitcoin’s performance on Monday revealed just how sensitive it is to gold price movements.
- Super Wednesday to decide the market’s fate as the FED is slated to make yet another key interest rate decision.
The US has been on a mission to become the leading Bitcoin holder since 2024, but the latest crypto news reveals its lead could be challenged. Moreover, its trade rival China is threatening to take away that lead.
According to recent crypto news reports, China’s Bitcoin holdings are rapidly approaching U.S BTC holdings. The latter currently stands at roughly 198,000 BTC according to recent reports, while China reportedly holds over 194,000 BTC.
What’s even more interesting is that China maintained an aggressive stance against crypto over the years. Despite this, the country continues to build up BTC reserves, highlighting the love-hate relationship with the digital asset.
China previously cracked down on Bitcoin ownership as part of its risk control strategies. This was mostly due to the highly speculative nature of crypto prices and their links to illegal liquidity exit from the country.
Crypto News: Gold Vs. Bitcoin Price Move
Bitcoin price kicked off Monday on a bullish leg, reigniting hopes of a recovery after almost retesting its 6-month support. For context, the latest crypto news update showed that BTC price jumped back above $88,000 after falling towards the $86,000 price zone this week.
A deeper dive into the slight recovery revealed that there was more to it than meets the eye, and that it may have had something to do with gold prices.
The latter briefly experienced a wave of sell pressure on Monday after briefly pushing into a new all-time high above $5,100.
The slight pullback signaled profit-taking, and this was important because gold has been rallying because of its safe-haven status. Exiting liquidity signaled rising confidence on the risk-on side of things, hence Bitcoin was able to absorb some liquidity.
This narrative also aligned with the slight uptick in crypto sentiment. This was characterized by a shift from extreme fear at 20 points to fear at 29 points. However, positive crypto news this week may fuel more recovery.
The Markets Await Major Crypto News on Wednesday
The crypto market anticipates a major move for Bitcoin and altcoins this mid-week, courtesy of key events. Various factors, including energy, influence Bitcoin price outcomes.
US crude oil inventories will be released on Wednesday and may have a significant impact on BTC prices. This is because a substantial amount of the energy used for Bitcoin mining comes from oil.
Lower oil supplies mean higher energy costs, hence a higher Bitcoin mining cost. This may lead to higher pressure, and the opposite is also true. In other words, oil supply news may trigger significant Bitcoin price volatility in the second half of the week.
The market is also waiting for the US Federal Reserve to announce its next interest rate decision on Wednesday. This has historically been one of the biggest factors influencing liquidity flows in the crypto market.
The FED may decide to raise, lower, or hold interest rates stable, depending on key market factors. A higher interest rate means access to liquidity becomes more expensive, and this outcome historically hurt the Bitcoin price.
On the other hand, demand for Bitcoin may accelerate if the Federal Reserve lowers interest rates. Ultimately. These factors represent key major crypto news events this week.