What does the near future hold for Bitcoin?
Bogdan LashchenkoWhat will 2023 bring us?
For a long time, crypto experts have been discussing what 2023 has prepared for digital asset traders and investors who invest their money in Bitcoin and other cryptocurrencies.
Opinions have been divided into two camps. The first ones thought that the cryptocurrency winter will continue for some time, after which we will see a new cycle of Bitcoin and the bullish movement. Some people stated that the whole of 2023 will be a bad year for the world of cryptography or even collapse the whole industry, however, there are very few such representatives of the community.
The second half believed that 2023 will become an outlet for investors and close in the plus. Separate persons, for example, the CEO at XOR Strategy, Aurelien Ohayon have stated many times that the bull run starts right now. By the way, he said this not intuitively but relying on the global history of the BTC price changes and the analytics of cycles of the main cryptocurrency.
Aurelien’s words are true because the first 3 weeks allowed Bitcoin to grow by more than 30%. Besides the flagship cryptocurrency, many other altcoins also demonstrated solid growth and we were able to see how some tokens’ prices increased by 20%, 30%, 40%, 80%, and 100%, and even above 200%.
After BTC reached the mark of $23,000, which is marked as a strong opposition point, the community started asking new questions. Will BTC stop growing or will it drop? Or the purchasing power will be enough to do a complete breakthrough and reach $25,000, $28,000, and possibly $30,000.
It is worth reminding that Bitcoin is traded for $22,850 at the moment. Over the last week, the flagship asset has demonstrated 9% growth.
What does the financial analyst BitRiver say?
A few cryptocurrency experts have shared their expectations from the upcoming movement. The financial analyst of the company BitRiver Vladislav Antonov noticed that the main digital asset has shown more volatility in recent days than a few days before. BTC reached $21,000, then dropped down to $20,700, and grew to $23,300 in a few days, after which it dropped down to $22,700, and then returned to the level of $23,000 again. Now, the digital asset has slowed its tempo and started consolidating.
Antonov connects the price drop of the flagship cryptocurrency, noticed a few days ago, with a sharp drop in the S&P 500 and NASDAQ indices. Digital asset investors started blurring the line between the traditional financial market and the digital asset market a long time ago, so their actions reflect that the news of the financial sector directly influences Bitcoin and other cryptocurrencies, consequently.
James Bullard who holds the position of the head of the Federal Reserve Bank of St. Louis did not refuse to comment on the connection between digital assets and the financial market, and also the US Federal Reserve policy. According to him, the US Federal Reserve has to be stricter in 2023 and the regulation of digital assets has to reach a new level.
Returning to the topic of the Bitcoin price changes, it is worth noting that after the quick and relatively rapid growth of the flagship crypto asset, BTC has started losing its price. The correction did not help to drop Bitcoin below $20,300 because the level of support withstood and did not allow “digital gold” to go down. It signals the bullish sentiment of the market and the big power of buyers.
FTX influences the market once again but positively this time
Another possible reason for the appearance of interest in digital currencies from investors and, in particular, American traders is the statement of John J. Ray III about the possible return of the bankrupted exchange FTX into the big game. However, the majority of representatives of the cryptocurrency community have considered it unlikely that FTX will return the trust of its clients.
After the company collapsed in October, and FTX was dealt damage of more than $1,800,000,000, many crypto enthusiasts moved to other platforms that consider a factor of security and stability more important than the American exchange.
Besides, many experts noticed that amid the destruction of the reputation, clients will never want to return to this exchange. Sam Bankman-Fried and his team, according to the information received from various editions, spent more than $40,000,000 of client money to realize his desires over the last 2 years. They bought 19 residential properties in the Bahamas and had no limits, using luxury hotels, food, and premium airline tickets.
The news from the CEO at FTX helped not just attract interest to the cryptocurrency industry but influence the rate of the token of the exchange, FTT. This digital asset quickly recovered to the mark of $2,50, which meant 37% growth. Fans of derivative instruments were unlucky because many cryptocurrency exchanges (if not all of them) removed the function of trading this asset with leverage for an obvious reason. Amid FTT, the main cryptocurrency looked more restrained, however, the growth of BTC displays that the market has a more bullish sentiment than before.
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Reasons that can lead to growth
As a result, a few main reasons can be mentioned, due to which we can see the upward movement. The first reason was the falling dollar index. Investors follow both digital assets and the traditional financial market. The weaker the dollar, the more motivated they are to invest money in BTC, which is positioned as a deflationary asset. The opposite is also correct.
The rise of the S&P 500 index by 1,88% can be considered the second reason for the growth of digital assets. Another possible reason was the statement made by Christopher Waller, a member of the Federal Reserve Board of Governors of the United States who is famous for aggressive interest rate growth. At one of the meetings, he said that it is worth thinking about reducing the tempo of interest rate growth.
The statement made by the US Treasury Secretary Janet Yellen was not left unnoticed. The last one said that if the US Congress continues to refuse to increase the ceiling of borrowings, which exceeds $31,000,000,000,000, then this could lead to a global financial crisis and default. Once again, remember how the power of the dollar influences the faith in Bitcoin and draw a parallel.
During her statement, the US Treasury Secretary reminded investors one more time that BTC is a deflationary asset that can help them wait out the period of global dollar problems and earn funds. If many investors pay attention to this shortly, we will be able to see BTC reaching $34,000 very soon. However, $25,000 and $30,000 are actual growth goals.
What does Coinglass say?
Speaking about other cryptocurrency experts and their opinion about the state of Bitcoin, it is worth noting the statement of the analysts from the company Coinglass. They noticed that the main digital asset has already broken the level of resistance, which was around the mark of $22,500. According to them, if Bitcoin can have a soft correction and consolidate at the mark of more than $22,500, it will be possible to state about the end of the crypto winter confidently. It means that the global market will turn around and we will be able to see Bitcoin together with altcoins moving upward and reaching new heights, as a result.
The opinion of the ENCRY founder
One of the founders of the company ENCRY, Roman Nekrasov shared his candid opinion regarding the future movements of the cryptocurrency market. He noticed that we can’t limit with a one-sided scenario in this situation like “Bitcoin will fall” or “it will grow”.
Nekrasov keeps in mind a few options of the scenarios, however, he said that the main digital asset can show a price drop to the mark of $18,000 soon even in the case of the bullish sentiment of investors and traders. He thinks that the white line in the crypto market has started due to the state of the American stock market. He closed the previous week in the plus.
Roman, just like the previously mentioned Vladislav Antonov, considers a slowdown in inflation and a slowdown in the interest rate increase by the US Federal Reserve contributed to the growth of Bitcoin and altcoins. Such events can’t be called positive only, however, investors have already gotten used to bad news that such rumors are considered as a positive signal.
The remarkable thing is that the rapid downturn of Bitcoin made stock exchanges close the majority of short positions on hundreds of millions of dollars. This, by the way, also provoked rapid growth because the more BTC rises, the more stop-losses and liquidations are triggered for traders who have opened short positions.
In turn, this boosts “digital gold” even more, which provokes the closing of other short positions and makes bitcoin grow even stronger. At the moment, according to the information received there are lots of opened short positions of $5,000,000,000. The ENCRY founder assumes that traders who have opened shorts are in a state of anxiety now. According to him, the growth of Bitcoin can continue the vicious circle of liquidation of such positions and the further growth of BTC.
Due to this, the majority of traders think about early closing of positions to avoid serious losses, and this, in turn, can push Bitcoin to new local heights. Roman Nekrasov assumes that we should only anticipate the price growth of BTC in the short term. He also said that the correction of the cryptocurrency will happen immediately after its growth. Nekrasov is unsure how serious this correction will be.
If we consider longer distances, Roman thinks that the cryptocurrency market might suffer from a serious blow. The reason for it will be the consumption slowdown in the USA and we remember that the stronger the position of the dollar the weaker the position of the main cryptocurrency will be. According to Nekrasov, BTC might drop to the mark of $20,000 shortly after solid growth but the second month of this year should change the situation.
Conclusion
Many experts expect Bitcoin to grow shortly. However, due to the financial sector might improve in the USA, investors will start transiting their money from digital assets to the traditional financial market. This can provoke the price drop of digital assets. But many experts are confident that the crypto winter has come to an end or soon will be over and 2023 will become positive for the sector of digital assets.
Bogdan Lashchenko – content manager at EgamersWorld.Bogdan has been working at EGamersWorld since 2023. Joining the company, he began fillin the site with information, news and events.