Why is Bitcoin Going Up? Is FOMC Fueling the Rally?
The price of bitcoin is increasing today as the bulls push the price beyond the significant resistance level of $23,000. After building up enough strength, the price remained stalled at roughly $22,850 for a few days before retracing upward in a bullish direction. Despite the fact that the bullish impetus looks to have been lost, there is still a chance for a bearish pullback.
As the worldwide crypto market is up and its value increased by more than 2% today, the cryptocurrency market is gaining, trying to reach $1.1 trillion as soon as possible. The trading volume also spikes by 25% to mark levels close to $50 billion at the moment.
Reasons for Bitcoin Rise
- Increase may indicate that the market is recovering its composure following a turbulent year that was marred by interest rate increases and cryptocurrency controversies.
- In 2022, the Federal Reserve raised interest rates seven times, which had a disastrous effect on stock prices and cryptocurrency holdings. The central bank increased the borrowing rate to 4.50% in December, the highest level since 2007.
- The January increase can be viewed as little more than a rebound from the FTX scandal, which shook the sector.
- Many Analyst predicts bullish trend to extend in 2023.
Example - Anthony Scaramucci, briefly the White House communications director during the Trump administration and now chief executive of SkyBridge Capital, believes that 2023 can be a “recovery year” for Bitcoin.
- Large investors which are known as “Bitcoin Whales”, have started accumulating BTC once again. According to data from on-chain aggregator Santiment.
- FOMC Meeting
As the government implements strict measures to stop increasing inflation, FOMC meetings are fairly favourable for the broader crypto market. This has a beneficial effect on the crypto space in turn, but only briefly. The next meeting minutes could also have a negative effect on cryptocurrencies and stocks.
The FOMC starts its meetings on January 31 with an interest rate decision anticipated the following day. Positive inflation numbers could influence the FOMC's decision and drive up BTC and stock prices. The market has recovered from the unimpressive US bank Q4 2022 earnings reports as investors wait for more information on the potential Fed decision.
As per tweet from – Matthew Dixon (CEO of Evai )
Interest rate decision +25bps will likely spark a relief rally in Bitcoin and Altcoins and risk assets so long as expectations are met that interest rate increases are slowing whilst economy is currently robust. However, economy will slow dramatically in coming months in my opinion.
The use of hawkish language and FED and FOMC dedication to higher interest rates can be expected to continue. When the minutes are released, this may further force the equities and cryptos to respond badly.
Is this Bitcoin price manipulated?
- Numerous crypto analysts are working to explain the recent sudden increase in cryptocurrency value in rational terms - inflation is slowing, the Federal Reserve is thought to have stopped raising interest rates, good news on crypto - but no, that isn't actually it.
As longtime cryptocurrency writer and critic David Gerard explains: The big players in the industry are "buying" in order to control the market.
"The bitcoin price is whatever the large players need it to be," writes Gerard.
- Who makes the purchases? It is still unclear. It's just yet another way the big crypto companies and investment funds manipulate the market.
- But it's more likely that there will be additional suffering. It doesn't suggest the kind of optimism that usually propels markets upward with a recession on the horizon, historically high levels of job cuts, and bad retail statistics coming out of the US. Therefore, it would be a good idea to prepare for another decline in the price of bitcoin and the rest of the cryptocurrency market.
- Moreover, global bank Standard Chartered’s prediction on Bitcoin is super surprising. They predicted that Bitcoin could fall to $5,000 levels in 2023.
There are many opinions and forecasts about Bitcoin Price, some of which are bullish and some of which are gloomy. Where Bitcoin will go next can only be determined with time. Several seasoned analysts have been predicting that the Bitcoin bubble will pop within the next decade. However, the BTC is still a popular choice and has over time enabled investors to amass significant wealth.
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