Bitcoin Tops $23,000; Here’s What Experts Say On The Possibility Of A Bullish Reversal Trend in 2023
Bitcoin has kicked off 2023 with a positive note, with investors hoping for a reversal in the monetary tightening that spooked market players last year.
As per the data from CoinMarketCap, Bitcoin briefly topped $23,000 on Monday for the first time since August 19, 2022.
“The crypto market is having a delightful start to the year as it is back above the crucial $1 trillion mark,” Mahin Gupta, Founder of digital wallet infrastructure platform Liminal, said in an emailed comments to AlexaBlockchain.
Mahin pointed out that BTC is up by 37% this month and the second largest crypto Ethereum, which follows the BTC trajectory, has surged by 34% bringing much-needed cheer to the digital asset market. Solana (SOL) which was surprisingly caught in the FTX fiasco has witnessed sharp correction and is now among the top 10 digital assets by market cap.
Historically, Bitcoin performs better when it comes close to Bitcoin halving which occurs every four years. An upward trend in Bitcoin’s value is typical as investors anticipate the next halving event, which is a change in the Bitcoin network that reduces rewards for miners by half. Some investors view this as positive for the token’s price as it reduces supply. The next halving is expected to occur in March to May of 2024.
“Historic data shows that Bitcoin reacts better when it comes to Bitcoin halving which occur every 4 years and is due in May 2024,” Mahin added.
Mahin said that the digital asset industry is moving towards decentralization and self-custody to create a safety net around user funds.
“We are witnessing a paradigm shift in the way retail and institutional users are storing their digital assets and users are aggressively adopting self-custody storage solutions,” Mahin adds. “After the recent events, single-point failure is the biggest concern of the digital asset industry and this can be effectively addressed through decentralization and self-custody.
Mahin believes that the crucial Fed meeting next month will be a closely watched event as it will set the course of monetary policies and the rate hike will be the central point of discussion.
“Fed has sent out feelers that it may end its hawkish stance but the outcome of the meeting will decide the market mood in the coming weeks,” Mahin added.
However, one analyst cautioned that technical indicators suggest there could be some pullback from the Bitcoin’s recent rally.
Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, said that while bitcoin’s trend indicators are “generally signaling a strong upward trend,” its relative strength indicator, or RSI, “is diverging from the price’s upward movement and starting to slide down, which is not a good sign for the current price trend.”
The 2022 crypto market crash serves as a reminder of the high volatility of Bitcoin. Despite the potential for large gains during the 2020-2021 bull run, many investors experienced significant losses in 2022. This emphasizes the need for diversification and risk management in investing. When investing in Bitcoin, it is crucial for individuals to thoroughly research the market and invest only what they can afford to lose.
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