Bitcoin price (BTC) started February on the rise, after registering a slight increase of 0.09% and standing at $23,098 at the time of writing (14:19 UTC). But will it be able to sustain the upward trend?
Despite coming from a bearish 2022, last month became one of the best starts of the year for BTC, after accumulating an increase of 39.6%.
The mark is only surpassed by the cryptocurrency’s performance in January 2013, when it accumulated gains of 44%, according to Coinglass data.
The bitcoin recovery
2022 was one of the worst years for the price of bitcoin, due to the collapses suffered by large crypto-industry ecosystems such as Terra and the FTX exchange, which influenced the collapse of BTC to approximately $16,000, a price it had not reached for two years.
Despite the fact that in the first week of 2023, the cryptocurrency registered few movements, the price of bitcoin increased nearly 40% and reached its highest value in the last five months, reaching $24,000 last Sunday. And although BTC failed to sustain above this mark, it was able to close January above $23,000.
What will February be like for the BTC price?
Taking 2013 as an example, one could predict that February could be even better for bitcoin’s performance.
Then, BTC recorded a 61.77% price rise during the second month of the year. In fact, the cryptocurrency had only two negative closes in February: 2014 (-31.03%) and 2020 (-8.6%).
However, this month might not be so good for the crypto-asset par excellence, according to the analysis of the firm Arcane Research.
“Due to a relatively strong market recovery, (U.S. Federal Reserve Chairman Jerome) Powell may take the opportunity to maintain a hard-line restrictive backdrop, emphasizing the importance of incoming economic data,” it argued in its blog.
The firm expects an interest rate hike of 25 basis points (bps) this Wednesday and another hike of 25 to 475 bps by March 22.
“Currently, zero adjustments during the May 3 and June 14 FOMC (Federal Open Market Committee) meetings are priced as the most likely outcome, but an additional 25 basis point hike remains possible,” it added.
Historically, such rate hikes cool bitcoin volatility, according to Arcane’s data.
“This could suggest that the FOMC-induced massive volatility trend in BTC is receding,” he highlighted.
Meanwhile, the host of CNBC’s “Mad Money” financial TV show Jim Cramer said the price of bitcoin and the rest of the cryptocurrencies will pull back to provide “entry opportunities” amid the current uptrend.
“If we’re in a bull market, and I think we are, you have to prepare. Now we have to prepare for the down days because, in a bull market, those are buying opportunities,” he said.
However, Cramer’s recent comments on cryptocurrencies have been rather inconsistent.
Last December, the presenter advised investors to sell their cryptocurrency positions to “limit some losses.” But, the market rallied significantly the following January.
What do technical analyses say about the bitcoin price?
Analyst Altcoin Sherpa mentioned on Twitter that bitcoin could be following in its footsteps of late 2018/early 2019, a period when BTC rallied strongly after a multi-month downtrend.
$BTC: This is not a fractal at all since the overall price action beforehand is way different in 2018. With that said, I'm still trying to think about where we are at in the current market cycle and how this could go. #BTC #Bitcoin pic.twitter.com/r1iL6IBeBK
— Altcoin Sherpa (@AltcoinSherpa) January 30, 2023
“In 2018, we saw very clear signs of a prolonged downtrend, followed by an accumulation cycle, which resulted in a strong move from $3,000 to $14,000,” he commented.
He noted that in 2023 we are seeing “sort of a version of 2018 going into 2019 with this current rally, but everything is on a shorter time cycle. This is true for several reasons, the main one being that 2022 was a slaughterhouse and didn’t look like 2018.”
According to the analyst, bitcoin will rise to $25,000 in the next few days and that could continue its course to $30,000.
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