Bitcoin price momentarily rose above $23,000 on Saturday for the first time since mid August. Bets that the Fed will pivot on its interest rate hikes is largely behind the gains recorded since the beginning of the year. Besides, investors appear to have priced in Genesis’ crisis after FTX’s insolvency late last week. Nonetheless, the persistently high inflation and subsequent risk aversion continue to weigh on the crypto industry.
Fundamentals
In 2022, high inflation and an ultra-hawkish Fed were major beaqrish drivers for cryptocurrencies and other risk assets. In 2023, hopes that the central bank will ease on its aggressive policy have boosted BTC/USD. The optimism has improved the crypto fear & greed index from a fear level of 29 in the past month to a neutral of 52 on Tuesday.
At the same time, investors appear unperturbed by the latest casualty in the crypto crisis – Genesis. In the past week, the crypto investment company’s lending arm sought bankrupcy protection. After FTX’s insolvency that saw bitcoin price drop to a 2-year low of $15,535 in November 2022, Genesis’ crisis appear to be priced in.
Bitcoin price prediction
BTC/USD rose above 23,000 earlier on Monday before pulling back. Notably, this is the third consecutive session that the bulls have unsuccessfully attempted to break the aforementioned resistance zone.
Bitcoin price began 2023 at around 16,500. In two weeks, it had rallied to the psychological level of 20,000; after which it entered into range-bound trading for about a week. With the heightened bets that the Fed will soon ease on its monetary policy tightening, the cryptocurrency rose above 23,000 on Saturday for the first time since mid-August 2022. As at the time of writing, it was up by 1.2% at 22,988.12.
As seen on its daily chart, bitcoin price continued to trade above the 25 and 50-day exponential moving averages. Based on these technical indicators, coupled with the fundamentals, the bulls have an opportunity to push the crypto even higher in coming weeks.
However, as investors await the Fed interest rate decision in the next week, BTC/USD may be subject to curbed gains. In the immediate term, the range between 23,500 and 22,000 will be worth watching.
Even with further rallying, I expect it to hover around 24,000. In line with my cautiously bullish thesis, I expect bitcoin price to continue finding support along the 25-day EMA at 19.950 while 25,000 remains evasive for a while longer.
