Bitcoin price have been volatile over the past few weeks, losing 0.62% and dropping to $23,394 as of today. This is significantly lower than its all-time high of $68,000 in November 2021 [1], when the crypto market experienced a brief uptick.
Since then, bitcoin has lost more than 70% of its value [2], with the token’s high point being in March 2020 when the Federal Reserve began to aggressively raise interest rates [3]. This has resulted in a prolonged period of losses for the cryptocurrency, with its current market value being lower than it was one year ago. With the market in a period of uncertainty, financial experts generally advise against investing more money in crypto than you’re willing to lose.
References:
[1] Bitcoin lost over 60% of its value in 2022 – CNBC [2] Bitcoin Price Tracker (BTC/USD) – TIME [3] Bitcoin’s price history: 2009 to 2023 – Bankrate.comIs the Bitcoin Price Ready to Test $23K Again?
Cryptocurrency traders have been cautiously watching Bitcoin as it continues to fluctuate around the well-known psychological resistance point of $23,000. After reaching an all-time high of $24,814 on December 16th, BTC has since retraced to trade at $23,083.
Analysts expect that BTC will either see a break-through of the $23,000 mark or a strong rejection from this level. If the later occurs, this could trigger a correction in the short-term to values between $20,000 and $22,000. This would be beneficial to traders who are looking to take advantage of low prices to buy Bitcoin.
On the other hand, if the resistance level is broken, BTC could very likely continue its bullish trend and reach prices over $25,000. This would be a huge win for traders who have been patiently waiting for a breakout.
As Bitcoin traders brace for a possible retest of the $23,000 mark, they are keeping a close eye on the market in anticipation of its next move. Whether BTC will break-through the psychological barrier or be rejected is yet to be seen, but one thing is certain – the cryptocurrency market is on edge.
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Economic Inflation Against Jobs/Wages? Another Look at the Fed’s Hike in Rate
The U.S. Federal Reserve is likely to need to keep the benchmark interest rate at 5% or higher to squeeze too-high inflation out of an economy where the labor market remains strong even after nearly a year of the most aggressive round of Fed rate hikes in 40 years [1].
Friday’s jobs report showed employers added more than half a million jobs last month, far more than expected, and the unemployment rate fell to 3.4%, the lowest in more than 50 years [1]. San Francisco Fed President Mary Daly has said that the December projection of a 5.1% rate is still a “good indicator” for where policy is going [1]. Given the strength of January’s job gains, traders now expect the Fed to raise rates to the 5%-5.25% range in May [1].
The Fed targets 2% inflation, now running at 5% by the Fed’s preferred measure, the personal consumption expenditures price index [2]. The January blockbuster jobs report is likely to strengthen the Federal Reserve’s determination to raise interest rates above 5% and keep them there to slow inflation and help bring down unemployment [3].
References:
[1] Fed seen hiking policy rate above 5% as job gains surge [2] Fed seen hiking policy rate above 5% as hiring surges [3] Blockbuster Jobs Report to Push Fed to Hike and Keep Rates …
