Bitcoin Price Holding At Sunday Low of $23,000 -Are We Going Down Or Up?

The price of Bitcoin has been hovering around $23k for about a week now and now that we’ve entered February, investors are curious about the outlook of the token for the month. Here are a few factors that shed light on the future of bitcoin.

Bitcoin Outperforms Equities Indicating A Promising Future

Bitcoin’s price saw a significant increase in value by almost 40% in January 2023, compared to the 4% fixed income return from US Treasury bonds. An individual who invested $1000 in Bitcoin at the beginning of the year now has approximately $1400, while someone who invested the same amount in a 20 or 30-year Treasury bond only has $1040. The Bitcoin market has, hence, positioned itself as a better long-term investment option compared to government bonds.

The recent failure of FTX and Alameda has, however, hurt the reputation of the cryptocurrency industry and resulted in financial losses for many institutional investors. Nevertheless, a report by Goldman Sachs showed that Bitcoin was the leading asset in terms of returns and risk-adjusted returns, surpassing equities, precious metals, and global indexes such as the S&P 500.

The Bitcoin market recently celebrated its 14th anniversary, and two countries, El Salvador and the Central African Republic, now accept it as legal tender. The price of Bitcoin at the time of writing is around $23,135, with a market capitalization of $446 billion.

The surge in January’s crypto market has been credited to short squeezes and forced liquidations, where approximately 22,910 traders lost approximately $59 million in the past 24 hours. However, the impact of large Bitcoin investors, known as “whales”, has also been significant in driving the recent rally.

Fed Interest Rates Put Into Question Bitcoins Future In Question

The Federal Reserve Interest Rate Decision and subsequent press conference by Fed Chairman Jerome Powell is a major event for the financial market as it has the potential to impact various assets, including Bitcoin. The Federal Reserve has two mandates: to maintain low unemployment rates and to control inflation.

The bank’s stance on these mandates can be either hawkish or dovish. A hawkish stance means the bank is aggressive in controlling inflation and often results in a rise in interest rates. On the other hand, a dovish stance prioritizes economic growth and employment over interest rates. Currently, the Fed is considered hawkish.

The market is anticipating a 0.25% hike in interest rates from the upcoming decision, with a 99.4% probability for a 25 basis point hike, as seen in the CME FedWatch tool. The most significant event of the day will be the Fed Monetary Policy Statement and Powell’s speech 30 minutes after the rate decision and statement are released. If Powell remains hawkish, it could trigger a boost for the US Dollar, leading investors to shy away from borrowing and causing a sell-off in risk-on assets like Bitcoin and the stock market.

The Federal Reserve Interest Rate Decision and Powell’s press conference are closely watched by the financial market due to their potential impact on the price of Bitcoin and other assets. The outcome of these events will depend on the Fed’s stance on its mandates and Powell’s comments during the press conference.

Higher-than-usual volatility is expected due to the announcement, and investors and market participants should be prepared accordingly. The Federal Reserve’s role in controlling inflation and maintaining low unemployment rates is crucial for the stability of the financial market, and its decisions and statements can have far-reaching effects.

Bitcoin’s Price Performance and Future Outlook 

Recently, the price of Bitcoin has seen a major rise on a daily basis, surpassing both the 50-day and 200-day moving averages and bringing an overall positive sentiment to the crypto market. Although it faced resistance at $21,500 in mid-January, buyers were able to push past this level and establish a strong demand zone between $20,000 and $21,000.

The price holding above the 200-day exponential moving average is a bullish signal for the market trend, though a correction or consolidation period may be necessary to sustain upward momentum. Potential resistance for buyers can be found at $24,000 and $25,250, however, any dips towards the demand zone present a good chance for accumulation.

However, the technical indicators for Bitcoin are showing signs of weakness, indicating a potential retest of the demand zone in the near future. On the other hand, inputs from market experts such as Peter Brandt, an experienced analyst, appear to be optimistic about the future of Bitcoin after recognizing a “double-walled fulcrum pattern,” which he deems a unique technical formation.

He believes that by mid-2023, Bitcoin will reach its all-time high of $68,789. In the short term, he predicts that Bitcoin will first hit $25,000, then experience a correction to $19,000 before resuming its upward trajectory. However, he acknowledges that the crypto market’s volatility can make it challenging to predict prices.

#BTC has performed its Monthly Candle Close below the $23400 resistance

Until $BTC is able to reclaim $23400 as support…

Technically, BTC has confirmed to remain inside the $20000-$23400 range for the time being#Crypto #Bitcoin pic.twitter.com/8MC9VjEs1n

— Rekt Capital (@rektcapital) February 1, 2023

Market analyst Rekt Capital has a similar outlook, projecting that Bitcoin may soon consolidate between $20,000 and $23,400. Bitfinex’s recent Alpha report also mentions the possibility of a pullback but indicates that the current trend suggests the bottom may already be in.

The report suggests traders and investors exercise caution as they await a full year since the 2022 bear market rally. According to the data, short-term holders will continue to sell at a profit while long-term holders will maintain their positions, resulting in a net positive for the entire market in January 2023.

Altcoins Take The Market By Storm

While Bitcoin continues to dominate the market, altcoins aren’t left behind. A bunch of exciting crypto projects have entered the market in recent months, and here’s a quick look at a couple of them.

FightOut is an all-new web3 fitness platform that aims to revolutionize the move-to-earn (M2E) crypto niche. Unlike existing M2E applications that only track steps and require NFT buy-ins, Fight Out offers a comprehensive approach to tracking and rewarding physical activity, without the need for any buy-ins.

The objective of the Fight Out project is to establish a presence in key urban centers through gym acquisition and to launch a smartphone application for tracking physical activity in the second quarter of 2023. The app will feature a unique token economy, enabling users to earn incentives for participating in M2E activities and to engage with the Fight Out metaverse.

FGHT tokens power the ecosystem and can be used for discounted gym memberships, competitions, and peer-to-peer fitness wagers. FGHT is set to list on centralized exchanges in April and has already raised $3.75 million. Presale for the token is currently live on the website where users can purchase FGHT tokens for 0.01887 USDT. The price will increase incrementally so it’s best to purchase the token right now.

RobotEra is a new blockchain-based metaverse gaming platform. It allows players to create their own virtual worlds and govern them using robot avatars. The platform runs on the native token TARO, which provides access to special features and can generate passive income through staking.

The TARO pre-sale has raised over $803,000 and has the potential to grow in value, especially in the GameFi sector. The team aims to extend their technology to other industries apart from the crypto space as well. The pre-sale is still ongoing, and early investors have the opportunity to gain 60% in the market before the end of the pre-sale.

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