The price of Bitcoin (BTC/USD) in 2023 increases by 28%
The price of Bitcoin (BTC/USD) in 2023 increases by 28%

The price of Bitcoin (BTC/USD) in 2023 increases by 28%

By Andrea Porcelli - 18 Jan 2023

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Bitcoin has started its 2023, in the best possible way, the price of the crypto against the dollar (USD) increased by about 28%. In fact, Bitcoin reached $21,000 last Saturday for the first time in months. 

Clearly, the peak is really still a long way off. But the news of a positive rally gives optimism to the whole industry. The whole industry is worried about inflation, news like this is great for a positive feeling toward the future. 

Why did the price of Bitcoin (BTC/USD) rise?

Last year was not a good year for the cryptocurrency ecosystem, amid scandals and insolvencies in the industry. The collapse of FTX caused a very large sector backlog, not to mention also the monetary situation regarding inflation. 

One thing that is clear without any doubt is that the FTX meltdown has greatly affected the market, leading to the ruin of several companies, such as the Winklevoss twins’ company, Gemini.

It created new issues, destroying the trust of users in the crypto world. However, the whole market crisis of 2022 is not entirely related to FTX, which led to the collapse of many exchanges, the loss of many tokens, and the failure of much of the market. 

Inflation and the major setback of the broader market tied to central banks were also predominant factors for the 2022 decline. 

Crisis that led Bitcoin and other cryptocurrencies to fall past minimum supports, moving away from the full value reached from 2020 to early 2021. 

Nevertheless, analysts are proactive; in fact, it is thought that several factors in the short term will lead to a rise in Bitcoin

Among the factors is a high likelihood that interest rates will fall, there could be talk of a new monetary policy. 

In fact, inflation is calming down and economic indicators are showing positive signs, especially in the United States. Traders are optimistic a cooling of inflation would mean a potential reversal of the trend, finally putting an end to bear markets. 

US inflation data gives positive signal

The end of 2022, brought a slow cooling of inflation, in fact in December the consumer price index fell 0.1%, meeting expectations. The main reason for the easing of inflation came from a sharp drop in gasoline prices, which are now lower on an annual basis. 

The year 2022 saw inflation end the year with a significant retreat. Consumer prices recorded one of the largest declines since the start of the pandemic. 

The Consumer Price Index, which measures the cost of a broad basket of goods and services, fell 0.1% for the month, in line with the Dow Jones estimate. This amounts to the largest month-on-month decline since April 2020, since most of the country was in lockdown to fight Covid. 

Taming inflation is one of the goals for 2023. If consumer prices continue to fall and inflation is better managed, then the market will have growth potential. 

“The most important macro data investors are focusing on is the weak services PMI and the trending down of employment and wage data. This coupled with downwards trend in inflation has led to improving confidence, while it comes at a time when valuations for Bitcoin… are close to all time lows. The prospect of looser monetary policy off the back of weaker macro data and low valuations is what has led this rally.”

So said James Butterfill, head of research at digital asset management firm CoinShares. 

Bitcoin prediction

Last week’s incredible rally marks a possible recovery for Bitcoin. After a long time, the currency moves above $20,000. Despite concerns about the global economic situation, Bitcoin this week pushed +28%, touching one of the highest points in recent months. 

The event gave a glimmer of hope for investors, who are ready for the end of the bear market and the beginning of a new positive trend. Meanwhile, the total market capitalization of crypto, is slowly approaching $1 trillion. 

Bitcoin’s short-term predictions, anticipate that by April Bitcoin will touch the new $25,000 resistance. Meanwhile, if inflation were to fall, Bitcoin’s potential growth would soar. 

“Bitcoin looks to have recoupled with macro data as investors shrug off the FTX collapse,”

concluded James Butterfill.

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