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Bitcoin Price Prediction Ahead of the Fed Rate Decision

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Bitcoin price has been in a consolidation phase as investors wonder whether a bear market capitulation has set in. BTC was trading at $17,000 on Saturday, a few points above the year-to-date low of $15,470. 

Federal Reserve meeting next

The BTC/USD price has moved sideways in the past few weeks as investors focus on the collapse of FTX. At its peak, FTX was the second-biggest cryptocurrency in the world after Binance. 

The collapse of the company has led to a significant contagion in the industry. Crypto prices have sunk while hundreds of crypto companies like Gemini and Genesis have come under significant strains.

However, on a positive side, the collapse has led to hopes that the regulators will set clear rules in the industry. I believe that a solution can be made to ensure that big exchanges have disclosure mechanisms. 

A good model would be the stress tests that big banks like Goldman Sachs, Morgan Stanley, and JP Morgan go through every year. Such stress tests could be made while ensuring that cryptocurrencies maintain the privacy of their customers.

Another model is where companies provide more open-source disclosures on their holdings. Companies like Binance and OKX have already started publishing their proof of reserves.

The next key catalyst for Bitcoin price will be the upcoming interest rate decision by the Federal Reserve. Economists expect that the Fed will hike interest rates by 0.50% after hiking by 0.75% in the past four meetings.

The main concern is that the US has published strong economic numbers recently. The economy added more than 286k jobs in November while wages grew by 5%. Therefore, the Fed could point to more rate hikes in 2023. It could also point to rates staying high for a while. Historically, risky assets like BTC and ETH tend to underperform in a period of high rates.

Bitcoin price prediction

Bitcoin Price

The four-hour chart shows that BTC price has been in a tight range recently. In this period, it has formed what looks like an inverted head and shoulders pattern. In price action analysis, this pattern is usually a bullish sign.  

Bitcoin also remains slightly above the 25-day and 50-day moving averages. Therefore, the coin will likely have a bullish breakout towards the Fed meeting. If this happens, the next key level to watch will be $18,000.

Bitcoin

Bitcoin Price Could Get Extremely Ugly – Barrons

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Bitcoin (BTC/USD) price recent rebound has faded and its easy to see why. After soaring to a two-month high of $21,470, Bitcoin has pared back some of those gains to trade at $20,895. This decline is mostly because of the fundamentals and technicals of the coin as I will explain below.

Bitcoin Fundamentals

The main fundamental reason why Bitcoin is pulling back is the rising fears of a recession. A recent survey by WSJ placed the risk of a recession in the US at 61%. That is notable since it is the highest the figure has been in months. 

At the same time, Wall Street banks like Goldman Sachs, Citigroup, and Wells Fargo published weak financial results. Most of them said that their profits tumbled by more than 30% in the final quarter of 2022. Reading between the lines shows that most of them have allocated millions of dollars in credit loss provisons.

Historically, these provisions tend to rise when there is a fear of a recession. At the same time, many safe American companies have starte announcing substantial layoffs recently. Amazon is laying off 18,000 people while Microsoft, Salesforce, Meta Platforms are laying off thousands of workers. In a note, an analyst at Oanda said:

“Bitcoin prices are weakening as growth fears have Wall Street worried a…

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Bitcoin

2 Reasons Why Bitcoin Price is Soaring in 2023

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Bitcoin price has staged a strong comeback in 2023 as investors rushed to buy the dip. The BTC/USD exchange rate surged to a high of 21,465, the highest level since November. It has risen by more than 30% from the lowest point in 2022. Here are the top reasons why BTC price is soaring.

Mild recession hopes

Bitcoin and other financial assets like stocks and gold have rallied because of the falling inflation in the United States and around the world. Consumer inflation dropped from 7.1% in November to 6.5% in December. Core inflation dropped to 5.7%. 

And on Wednesday, data from the US showed that wholesale prices dropped by 0.5% in December, higher than the expected 0.1%. The producer price index (PPI), rose by 6.2%, the lowest level since March 2021. This decline happened because of the falling energy prices.

Another data showed that retail sales tumbled in December. They dropped by 1.1% in December, the biggest decline in 2022. In a note, an analyst at RSM said:

“The lag impact of elevated inflation weighs heavily on U.S. households, it’s very clear that the median American consumer is still reeling from the loss of wages in inflation-adjusted terms.”

A recession is often seen as a bad thing. But in the financial assets, it can be seen as…

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Bitcoin Price is Getting Severely Overbought: Is it a Buy?

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Bitcoin price made a spectacular comeback in the past few days as investors reflect on encouraging data from the United States. The BTC/USD exchange rate surged to a high of $21,365, the highest point since November. It has risen by more than 35% from the lowest level in November. So, is the tide turning?

Will the Fed pivot?

Bitcoin and other global assets continued surging as investors reacted to the latest American economic data. Data published last week revealed that the American consumer inflation inched downward in December. It dropped to 6.5% in December, the sixth straight month of decline.

A week earlier, data by the Bureau of Labor Statistics (BLS) showed that the country’s unemployment rate dropped to 3.5% in December. In the same period, wage growth increased by 4.7%, lower than the previous month’s 5.2%. A decline in wage inflation is a positive sign for Bitcoin and other financial assets because of the Federal Reserve.

The Federal Reserve has been in a strong tightening phase in the past few months as it continues its battle against inflation. Its goal is to soften the economy and prevent a hard landing. Such a situation will happen when wage growth eases. 

Therefore, Bitcoin has risen because of the rising chances that the Fed will start to pivot. Historically, Bitcoin and other…

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