John Isige
The largest cryptocurrency is working around the clock to balance gains from last week’s impressive rally to highs slightly above $25,000 and the possibility of an uptick in volatility ahead of the Federal Reserve Open Market Committee (FOMC) minutes. Bitcoin price has stayed relatively unchanged over the last 24 hours while trading at $24,790 at the time of writing.
Can the FOMC Minutes Propel Bitcoin Price To $28,000?
Investors are waiting anxiously for the FOMC minutes and how Bitcoin price will react to them. Some experts foresee a spike to $28,000, while others believe the most traded cryptocurrency is due for a retracement possibly to $22,000.
Bitcoin price has generally kept the entire crypto market on an upward roll since the beginning of 2023 owing to improved macroeconomic conditions. Investors are willing to ignore the impact of the collapsed FTX exchange. Improving confidence in the crypto may create enough liquidity to support a bull market.
Although regulators from the United States seem to be on an offensive operation following the implosion of FTX, the Hong Kong Securities and Futures Commission (SFC) is taking a proactive approach by publishing new laws to provide oversight over trading platforms as a way of ensuring investor safety.
It is clear Hong Kong is fronting itself as the next crypto hub, supported by a new regulatory framework. Retail investors will have a place in the ecosystem with the ability to buy and sell in large volumes on licensed exchanges.
The bullish outlook for Bitcoin price is also supported by other crucial macroeconomic factors such as the seemingly decreasing inflation and a weakening US dollar. Investors tend to digress toward riskier assets like BTC and crypto with inflation going down. Hence, the uptick in trading volumes and an influx of funds into Bitcoin-related products.
After three weeks in a row of a strengthening US dollar, with a gain of approximately 1.7% in February, the greenback’s index is doddering at around 104 – in the wake of a six-week high of 104.67, posted on Friday.
A weakening US dollar is a plus for Bitcoin price as it tends to support the momentum. In other words, BTC is inversely correlated to the US dollar.
As reported yesterday, Bitcoin price performance in 2023 will depend on certain regulatory factors and the battle to bring down inflation, especially in the US. That said, investors hope that the upcoming FOMC minutes would keep the uptrend intact and even propel Bitcoin price above $28,000.
Investors are also fixated on the European and American manufacturing data, set for release later on Tuesday in addition to the core PCE price – expected on Friday this week. These macro factors will help shape the crypto market in the coming days, possibly weeks.
Ordinals and China Buoy Sentiment Keep Bitcoin Steady
The launch of a new NFT protocol referred to as Ordinals is creating a lot of hype around Bitcoin. The creator of this protocol, Casey Radarmor believes it has the potential to increase the oldest blockchain’s use cases or if you’d like a boost for its utility.
White the move has been welcomed by many, some believe it may congest the network even more, interfere with regular transactions and even cause a spike in transactions fees attributed to the heavy data required to inscribe GIFs as well as digital images. In other words, the whole exercise could easily negate the mission Satoshi Nakamoto had in mind for Bitcoin.
Bitcoin Price Outlook After Rejection From $25,000
Bitcoin price’s eight-month high slightly above $25,000 was bolstered by a massive liquidation of about $155 million based on insight from Bitfinex exchange. However, an immediate pullback prevented a daily close above this crucial psychological level.
Analysts at Bitfinex Alpha believe the swing above $25,000 was by itself, “another significant step forward for the asset as we continue to see out what we believe are the latter stages of a gruesome bear market.”
The weekly report referred to as Bitfinex Alpha revealed that addresses with below 0.01 BTC recently rose to an all-time high of above 32.6 million. Furthermore, ‘shrimp’ addresses—with less than 1 BTC also spiked to a new all-time high of 43.2 million.
This uptick in key metrics implies there has been a spike in the influx of funds into BTC markets and related products. Moreover, addresses with non-zero balances shot up to 44 million for the first time in history.
“Traditionally, during a Bitcoin bear market, the balance of wealth in BTC tends to concentrate in the hands of investors with presumably greater conviction. It has historically been a sign that a new Bitcoin bull market is starting and that new investors are starting to enter the market when this concentration of BTC wealth starts to shift in the other direction,” Bitfinex Alpha report reads in part.
In the meantime, Bitcoin price is exchanging hands at $24,660 while absorbing pressure from investors locking in profits from last week’s rally above $25,000. Support above $24,000 – shown in the lower yellow band is in place to ensure the leg does not stretch to test lower levels at $22,000 and $21,000, respectively.
The Money Flow Index (MFI) affirms the notion that the influx of funds into BTC markets has been on the rise over the last couple of weeks. As observed, the MFI is almost reaching the overbought region (above 80.00) after dropping to 40.65 in the first week of February.
Like a Relative Strength Index (RSI) the MFI underlays the chart taking into account both inflow and outflow volumes. A persistent upswing in this technical indicator hints at the momentum backing a sustainable uptrend – the opposite of this is also true.
Investors who may be booking long positions in Bitcoin price could be riding on the fact a golden cross recently appeared on the daily chart. This highly sought-after bullish pattern comes into play when a shorter-term moving average flips above a longer-term moving average.
In BTC’s case, the 50-day Exponential Moving Average (EMA) (in red) crossed above the 200-day EMA (in purple). Traders look forward to this technical index because it reinforces the bullish grip on Bitcoin price. The bellwether cryptocurrency has in the past validated significant uptrends even to new all-time highs with the formation of a golden cross.
On the upside, buyers must defend the support at $24,000 at all costs, to avert any possible risks of an extended pullback to $22,000 and $20,000, respectively. Depending on how market participants react to the FOMC minutes, Bitcoin price may gain momentum to close the gap to $28,000 in the coming days or a few weeks.
Bitcoin Alternatives To Buy Today
Before you start accumulating bitcoin, do you know about these new coins whose presales are selling out quickly in 2023? Investors are diversifying their portfolios with the best crypto presales, promising a better risk-reward ratio.
Fight Out (FGHT), for instance, is a leading move-to-earn project currently conducting a presale ahead of its initial exchange listing expected in early March. Investors scooping up this Web3 fitness platform have so far raised $4.47 million, although the price is increasing in 12-hour intervals.
Related Articles:
- Hong Kong to Open up Retail Crypto Trading in Bid to Become Major Global Crypto Hub
- Ethereum Price Prediction – Are Bulls Getting Ready to Charge to $2k as Deflation Reduces Supply?
- Is Bitcoin Price Going to $250K in a Rerun of the 2017 Crypto Bull Market?
Fight Out - Next Big Train-to-Earn Crypto
- Backed by LBank Labs, Transak
- Earn Rewards for Working Out
- Level Up and Compete in the Metaverse
- Presale Live Now - $5M Raised
- Real-World Community, Gym Chain
This article was written for Business 2 Community by John Isige.
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