"Cryptowinter is over." Why bitcoin rate will rise

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Author: Robert Strickland
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  • "Cryptowinter is over." Why bitcoin rate will rise

Experts told about the impact of U.S. economic policy on the crypto market and predicted further changes in the price of the first cryptocurrency

After some volatility over the past few days, bitcoin (BTC) price briefly returned to $24,000 on the night of February 2, rising to the level last seen in mid-August last year.

The rise in prices came on the back of the Federal Reserve's decision to raise interest rates by 25 basis points from 4.5% to 4.75% per annum. Overall, bitcoin gained nearly 40% in value in January, showing the best result since 2013.

BTC/USD
23 764 +649 (2,81%)

Bitcoin is not the only one experiencing an uptick amid the Fed's decision. Ethereum (ETH), the second most capitalized cryptocurrency, is up 6.2%, trading at $1,670, according to CoinGecko. The Ethereum community is gearing up for a long-awaited March update under the working name Shanghai, which will allow investors to take blocked ETH coins out of stacking. A test network to simulate this process, dubbed Zhejiang, was launched on Feb. 1.

"Bitcoin's movement is legitimate."

Sryptorg Trading Platform Manager

For bitcoin, we updated the local high at $24,281 on the Binance futures market. The next high is $25,512. With a high probability, we will come to it very soon.

The stock market is also on the maximum positive. Therefore, the bitcoin movement is logical. In such a market, it is logical to buy corrections in the direction of the main trend, which happened yesterday.

The prospect for the nearest future is the growth of the American broad market index S&P 500 to 4250 points, respectively, the whole crypto market will grow together with it.

"Coin grows following the indices."
Head of the analytical department of AMarkets

Bitcoin has long demonstrated a correlation with the U.S. stock indices: they grow - and the coin follows the indices, the same happens when they decline. Today we see bitcoin growing, just as the day before, the U.S. indices showed growth (Europe and Asia also closed in the green zone).

The reason is that the Fed's decision to raise rates by 0.25 p.p. was the expected and smallest move in almost a year. This indicates a slowdown in inflation in the U.S. and gives chances for the soonest phase-out of tightening of monetary policy.

In the absence of negative news for the market (GDP slowdown in the US, China, the eurozone, rising inflation, geopolitical events, etc.) bitcoin may add up to above $24k, which opens the way for further appreciation (in the range of $26k). Negative, which will indicate a decline in consumption and a slower rate of inflation than expected by the regulator, as well as events in the crypto market (problems at the exchanges), will be a factor for the decline in the price of the coin.

"Cryptowinter is over."
BitRiver Financial Analyst

For me, the bitcoin price does not correlate directly to changes in the U.S. Federal Reserve interest rate. The Fed meeting has an impact on the debt, equity, and currency markets. And bitcoin is already reacting to the S&P 500 index and the dollar index because the correlation between it and the S&P 500 index is 0.84 over 30 days and 0.41 over 90 days (the correlation dropped after the FTX crash).

The dollar index is down to 100.80 p. The S&P 500 index is up 1.40% and the Nasdaq is up 2.00%. Bitcoin rose to $23,812 amid a weaker dollar and rising stock indices. BTC/USDt pair recovered to $24,253 amid the weakening dollar and rising stock indices.

The dollar index opened the way to the level of 98 points. A new round of dollar weakening has begun. The fall of the dollar may accelerate on Friday after the publication of data on the labor market in the U.S. for January, which is positive for the crypto market.

The BTC/USDt pair is approaching important resistance of $25,000. Cryptozyma is over. To avoid new freezes, buyers need to consolidate above $25,000. Then you can raise the price to the $33,000-35,000 zone before the next U.S. Federal Reserve meeting on March 22.


 

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