Bitcoin has achieved 34% gains since the significant decline it witnessed in November 2022, as the largest and most famous cryptocurrency in the world rose by more than 7% to levels of $ 21,400, in today’s session, Tuesday, for the first time in about two months.
Bitcoin was also able to breach its 200-day moving average for the first time since January 2022. With these increases, the gains achieved by the cryptocurrency reach 34%, or about $5,300, since the bottom it reached on November 21 at Levels of 15 thousand and 479 dollars.
These rises coincided with the rise of US indices and their highest weekly gains in two months, after expectations of easing the Fed’s tightening policy towards raising interest rates as a result of slowing inflation in the United States.
Although the current highs are still far from the record set by the cryptocurrency in November 2021, which amounted to $68,900, it gives market players reason for some optimism.
The rally so far comes on the heels of a negative 2022 for the industry, which saw major bankruptcies and scandals in the cryptocurrency industry, including the collapse of FTX, and a sharp decline in the broader market linked to central bank actions.
US Fed expectations
Analysts said that a number of factors behind the rise of bitcoin in the new year, including the increased possibility of interest rate cuts, as well as purchases by large buyers known as “whales.”
The Fed is likely to keep interest rates high for the time being. However, some market players hope that central banks will start to ease up on rate hikes, or even cut rates.
Some economists expect the Federal Reserve to cut interest rates as soon as this year, and their view is supported by the risk of recession, which is an obsession in the minds of central bankers.
About two-thirds of the top economists surveyed by the World Economic Forum believe a global recession is likely in 2023, according to research published by the Davos conference organizer on Monday.
The US dollar also fell by 9% against a basket of currencies used by US trading partners in the past three months.
Bitcoin recovery period
Meanwhile, future events may give traders a reason For some joy in the new year, as we still have a year ahead of what is called “Halfing”, or the Bitcoin halving period, when the rewards for miners are halved, an event that some see as positive for the price of Bitcoin, because it puts pressure on supply. .
The next redress is scheduled to occur sometime between March and May 2024.
Analysts believe that the price of bitcoin could decline again if it closed below $18,000 in the next few days.
