Bitcoin price has had its value increase by close to 30% since the beginning of 2023. Improved risk sentiment is largely behind the rallying. However, market volatility may be rather subtle in the short term as investors keep an eye on the Fed meeting set for 1st February.
Fundamentals
Signs that US inflation has peaked and the subsequent optimism that the Fed may ease on its aggressive monetary policy has boosted bitcoin price since the beginning of 2023. The crypto fear and greed index, which tracks the key emotion driving the market, has been rising steadily in recent sessions. From a fear level of 26 in the past week, the index has improved to a fear level of 45 on Tuesday and a nautral of 51 on Wednesday.
Even with the improvement, Fed’s February meeting remains on investors’ mind. The total crypto market volume dropped by 10.35% over a span of 24 hours to $48.40 billion as stated by CoinMarketCap.
Bitcoin price prediction
Since the beginning of 2023, Bitcoin price has rallied by close to 30%. Indeed, it has been in the green for 14 out of 17 sessions. Since the past weekend, it has held steady above the psychological level of 20,000; which had been evasive for over two months. As at the time of writing, BTC/USD was at 21,342.10; up by 0.78%.
As seen on its daily chart, Bitcoin price remained above the 25 and 50-day EMAs. The formation of a golden cross late last week signalled further gains in the ensuing sessions. The bullish pattern forms when the short-term 25-day EMA crosses the long-term 50-day EMA to the upside. Besides, the crypto is in the overbought territory with an RSI of 89.
While I expect the main catalyst for BTC/USD to be the Fed meeting scheduled for two weeks from now, I am cautiously bullish on the asset. In the short term, I expect it to remain subject to curbed gains as the improved risk sentiment boosts the crypto industry.
In particular, the range between 22,042.38 and 19,950.92 will be worth watching. With a further improvement of the risk sentiment, the bulls may have an opportunity to retest August’s high of 23,515.90. On the flip side, signs that the Fed will maintain its hawkish stance may yield a pullback to 18,382.33.
