Bitcoin: Here’s What Might Push BTC Price Higher, Analyst Says
Charles Edwards, Capriole Fund founder and Bitcoin analyst, foresees a major catalyst that might boost Bitcoin’s price in 2023. The year 2022 was a rough one for cryptocurrencies, marked by falling prices after the Fed introduced restrictive monetary policies by hiking interest rates.
Most recently, the Federal Reserve moved to increase its benchmark interest rate by 25 basis points on Wednesday, which caused a drop in cryptocurrency prices. The Fed has now implemented a steady barrage of 10 straight interest rate increases since March 2022 to temper an overheating economy and control skyrocketing prices.
The only way the Fed can compete with Bitcoin is higher rates. But rates can’t go any higher because the system is breaking. The unwind will be relentless.
— Charles Edwards (@caprioleio) May 7, 2023
Edwards, in a new tweet, expressed the possibility of rates not going higher because the system was on the verge of breaking.
He tweeted, “The only way the Fed can compete with Bitcoin is higher rates. But rates can’t go any higher because the system is breaking. The unwind will be relentless.”
The idea that the Fed would suspend rate hikes soon or possibly decrease interest rates later in the year has contributed to Bitcoin’s over 70% year-to-date gains.
This is so because traders tend to steer clear of “risky” investments like cryptocurrencies when they anticipate the U.S. central bank maintaining its hawkish monetary policy to contain inflation.
Bitcoin price action
In the past week, Bitcoin mounted another attempt to surpass the closely watched $30,000 level, but bulls did not succeed.
Bitcoin’s (BTC) price fell to lows of around $28,394 on May 6 and remains down 1.42% in the last 24 hours to $28,880.
According to Glassnode’s most recent weekly report, the market has firmly recovered from the historical bottom discovery phase of the 2022 bear.
Selling pressure from new investors is now a key driving force that established resistance at $30,000. Should this present correction continue, the cost basis of the young supply holders at $24,400 may well be a psychological level to watch in the weeks ahead, Glassnode stated.