Bitcoin Price Just Under $23,000 - Late January Low of $22,700 Next Step?

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Bitcoin, the frontrunner of the crypto market, is priced at $22,776.30 today. Its price fluctuations is indicative of how the recent pitfalls in the crypto-market have not even spared Bitcoin. This is a challenging time for investors, as they are debating whether to put their faith back in Bitcoin or not.

Here’s a closer look at how Bitcoin has been affected by the undoing of the crypto market.

Bitcoin price is showing signs of a late January low

Bitcoin’s price today has stark similarities with its lowest point in late January this year- at $22776. Its price graphs clearly show that after a period of slow growth, it dips. After its lowest point on 30th January, it gained some momentum until the 1st of February 2023. The price of Bitcoin was at $22720.1 on the 6th of February but managed to go up a tiny bit before hitting a low of $22737 on the 8th of February. Considering this ongoing trend in its price movement, is it safe to assume that the dip we see today is quiet before the bullish storm?

“Golden cross”- how well can we rely on it?

On the 6th of February, Bitcoin’s closed on to the “golden cross” grips investors in the crypto market in anticipation. This phenomenon happens when a shorter-term moving average (SMA) surpasses a longer-term one. A price charting technique, “golden cross,” is often an indication of an approaching a bullish market. This rare occurrence happened after 18 months.

There is a chance of an approaching bullish market. We say so because the last time we witnessed the “golden cross” on Sept 2021. And two, much after its occurrence, the price of Bitcoin hit an all-time high.

The question is can investors rely on the “golden cross”? Or is it only a textbook ideal scenario? It is too soon to say if the “golden cross” can propel the Bitcoin price to another all-time high.

Previous causes chaos in the crypto market

The crypto-market is notorious for being directly proportional to even tiny changes happening to the economy.

Recently, Jerome Powell, the Chairman of the US Federal Reserve, caused a ripple in the crypto market while giving a speech on inflation and the current and future of the US economy. During his speech, he said the disinflation of the economy is still in its early stages. After the turbulent decline in the prices of crypto following the news on US unemployment, Powell’s words provided some much-needed relief to the investors.

Jerome emphasized that the process of disinflation won’t be easy. There is a possibility that the FED may raise interest rates again if the labor markets continue to be strong. His words caused the Bitcoin price to skyrocket by around $23000.

However, soon after his speech, the market witnessed a chop.

Naeem Aslam, the chief market analyst at AvaTrade, hinted that the interest rate could to as close as 5%.

In the past, Grayscale has also caused issues in the Bitcoin market. Grayscale is the largest bitcoin fund in the world, and its sale have had some repercussions.

Growth of Bitcoin throughout the last decade

Since its inception, Bitcoin has reached remarkable heights. Satoshi Nakamoto (pseudonym) is the person who developed the first bitcoin software in 2008. He then introduced the concept of cryptocurrency to the entire world. A year later, in 2009, the Bitcoin network was officially launched, and the world was consumed with the idea of a decentralized digital system for currency transactions. Bitcoin went live with the mining of the genesis block, and as they say, the rest was history.

According to a note which was in the block, it is believed that bitcoin was created because of the great financial crisis of 2008.

The price of bitcoin increased 10000 times, the first time in 2011 when the price surged from a mere $0.3 to $30. But fell back soon to $5 by the end of that year. This definitely gave a glimpse of its future valuation and what the investors stand to gain.

The year 2012 paved the way for further growth of Bitcoin after its first having. It caused a reduction in the mining reward, and competition grew, which resulted in future growth.

Bitcoin’s price experienced another great milestone in 2013. The crypto market witnessed the largest gain of close to 7000% when the price of Bitcoin peaked at over $1100, with a $1 billion market cap. This was equally motivated by a sudden increase in cryptocurrency.

Bitcoin’s growth didn’t invite much attention during the years that followed. However, the crypto industry continued to grow in full swing, which was further fuelled by the advancement of technology, awareness, and investments in cryptocurrency and innovations like proof-of-stake and smart contracts. Amidst this, Bitcoin’s price was steady, with an average of around $300. However, near the end of 2017, Bitcoin reached five digits and hovered around $20000.

During the pandemic, when the third having took place, it reduced the mining reward down to $6 coins. And the price of Bitcoin saw an increase, and it ended the year at $40000. It is believed that the growth was also driven by institutional investors and increased usage by corporations and businesses.

It was during this time that governments, investors, and centralized banks around the world started zeroing in on cryptocurrencies, which resulted in heavy scrutiny and tight regulations in the crypto market. However, none of these factors did really affect the price of Bitcoin.

What the future holds for Bitcoin and for us?

The rise and fall of Bitcoin since 2009 is indicative of its strong foundation. It shows, time and again, that Bitcoin is here to stay. Yes, the price of Bitcoin over the years has been punctuated by highly volatile and erratic market trends. But it has also climbed a steady graph if you consider a decade-long analysis. Yes, the price of Bitcoin sways and fluctuates with external factors, the health of the economy, competition from other emerging cryptocurrencies, and public opinions on Twitter. But at the same time, it is continuing to grow and proving to be profitable for businesses, corporations, and investors all around the world.

Fall out of many crypto companies, recent bankruptcies, and the unfavorable market of 2022 have definitely shaken up things in the crypto market. But despite this, Bitcoin is here to stay and harness investors’ trust again.

Is investment in Bitcoin a good idea right now?

Investors and analysts across the crypto market share a bearish view of bitcoin. Many predict that its price will touch $25000 following the recent “golden cross”. However, there are a few industry experts who assume that if the market continues to be volatile, the price of Bitcoin may fall near $21000. If the Fed ends up increasing the interest rate, it will definitely cause a hike in bitcoin value.

In times of such uncertainty, investors tend to move towards safe investment options.

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