Bitcoin is flirting with a break above the $18,000 level and its 50-Day Moving Average (at $17,835) ahead of the release of the US Federal Reserve’s latest monetary policy decision, which is expected at 1900GMT/1400EST. In wake of Tuesday’s much softer-than-expected US Consumer Price Inflation figures, traders are still pricing about an 80% chance that the Fed lifts interest rates by a further 50 bps to the 4.25-4.50% range.
However, expectations that the Fed lifts interest rates beyond 5.0% in 2023 have been sharply lowered, reflecting the view that the latest CPI data reduces the pressure on the Fed to keep tightening monetary policy so aggressively next year. As a result, Tuesday’s CPI data give bitcoin and the broader cryptocurrency market a substantial lift, with the world’s largest cryptocurrency gaining over 3.5% on the day as it broke out to fresh monthly highs. Price predictions thus remain bullish.
Price Prediction – Bitcoin To Push Towards $20,000 If Fed Interpreted As Dovish
Bitcoin is up around 1.0% on Wednesday in the run-up to the Fed policy announcement, indicative that markets are expecting something dovish. Everyone expects Fed Chair Jerome Powell to signal that the Fed needs to continue lifting interest rates (hence why markets are expecting rates to go close to 5.0% in 2023). His tone on the outlook for US inflation, which appears to be rapidly improving, and how long interest rates will need to remain at elevated (i.e. near 5.0% levels) to tackle inflation will thus be key.
Markets are increasingly betting on Fed rate cuts in the latter half of 2023 as inflation comes down and US growth weakens (and the economy possibly enters a recession). Should Powell fail to push back sufficiently hard against these expectations, then that could give risk assets like bitcoin more cause to rally. Bitcoin is clearly in a technical uptrend for now, and any $17,500 area may well be bought into. Bulls will be hoping a Santa Rally can also come in and help lift the cryptocurrency back to the $20,000 area by the end of 2022.
Can Bitcoin Rally 50% This Week?
Bitcoin is a highly volatile asset, but it has not seen a 50% rally in one week in many years when its market capitalization was much smaller, and it behaved much more like small altcoins do today. While the world’s largest cryptocurrency by market capitalization may well shoot higher this week if the upcoming Fed meeting giving investors reason to cheer, it has significant areas of technical resistance to contend with to the upside.
These levels include the 200DMA around $20,800, last month’s pre-FTX highs in the $21,500 area and the summer 2022 highs in the $25,500 area. A 50% rally from current levels would mean Bitcoin hitting around $27,000 and busting through all of these resistance levels, an unrealistic target for this week.
Bulls Beware – BTC Could Drop Under $12,000 Next Year, Says Analyst
The bitcoin bulls should exercise some caution, according to VanEck’s head of digital assets research Matthew Sigel in his 2023 market outlook. According to Sigel, the fact that several bitcoin miners are likely to go bust in the near future means that bitcoin may remain under pressure. He calls for a drop in the BTC price to the $10,000-$12,000 area, which he thinks would be the low point of the crypto winter.
According to Glassnode data, the BTC balance in miner wallets has dropped by 25,000 since July to 1.818 million. Miners have been forced to sell their holdings to cope with a double whammy of increased energy costs (meaning higher bitcoin production costs) and lower prices (meaning lower revenues).
Meanwhile, well-known macro analyst Andreas Steno Larsen warned stock investors that lower inflation might not be a reason to cheer. According to Larsen, a slowing of inflation often leads to a slowing in the growth of company earnings per share (EPS), which could weigh on stock valuations next year. Larsen said that, at current levels, stocks are not pricing an EPS slow down appropriately. If reality sets in and stocks head lower, this could weigh on the likes of bitcoin, which has had a tight correlation to equities in recent years.
Altcoins Offering Quicker Returns
Cryptocurrencies have been trading sideways for a few weeks now, leading some traders to start looking at alternatives with more potential in the short term. Listed below are some of the leading presales in the market, allowing investors to get in on the ground floor.
Dash 2 Trade (D2T) – Presale Enters Final Stage
Those interested in investing in a promising crypto trading platform start-up should look no further than Dash 2 Trade. The up-and-coming analytics and social trading platform hopes to take the crypto trading space by storm with its host of unique features.
These include trading signals, social sentiment and on-chain indicators, a pre-sale token scoring system, a token listing alert system and a strategy back-testing tool. Dash 2 Trade’s ecosystem will be powered by the D2T token, which users will need to buy and hold in order to access the platform’s features.
Dash 2 Trade is currently conducting a token pre-sale at highly discounted rates and sales recently surpassed $9.7 million. The pre-sale dashboard is going to be released on Friday, with the development team currently running ahead of schedule. Tokens are currently selling for $0.0533 each and will be listed on multiple centralized exchanges in around one month.
Calvaria (RIA) – Final Presale Stage Now
Major blockchain-based games like Axie Infinity lost significant traction in 2022. As a result, many investors interested in the crypto gaming space are looking for alternative avenues. Calvaria, an up-and-coming play-to-earn battle card crypto game, could be a good alternative. Calvaria seeks to boost crypto adoption by creating a bridge between the real world and crypto, a fun and accessible crypto game.
Investors should consider Calvaria’s RIA token pre-sale. Calvaria has now raised $2.44 million, with a crypto whale scooping up $97.5K in one purchase last week. The presale is in the final stage, with only 21% of tokens left.
RobotEra (TARO) is a Sandbox-style Metaverse that will enable gamers to play as robots and participate in the creation of its virtual world, including NFT-based land, buildings, and other in-game items. Due to launch in an alpha version in the first quarter of next year, it also plans to let players link up with other metaverses, in the process creating a multi-verse where NFTs from different platforms can interoperate.
1 TARO is currently selling for 0.020 USDT (it can be bought using either USDT or ETH), although this price will rise to $0.025 in the second stage of its presale. The project has now raised more than $545K in funds in the few weeks since the launch of the pre-sale.
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