The creator of Capriole Fund and expert on bitcoin, Charles Edwards, predicts a significant trigger that might increase the price of bitcoin in 2023. Cryptocurrency prices fell in 2022 as a result of the Fed enacting restrictive monetary policies by raising interest rates, making it a difficult year for the industry.
Most recently, on Wednesday, the Federal Reserve took a decision to raise its benchmark interest rate by 25 basis points, which led to a decline in bitcoin values. Since March 2022, the Fed has steadily raised interest rates ten times in a row in an effort to cool an overheated economy and rein in rising prices.
In a recent tweet, Edwards suggested that because the system was in danger of failing, rates might not rise.
He wrote on Twitter, “Higher rates are the only way the Fed can compete with Bitcoin. But due of systemic issues, rates are capped at current levels. The unravelling will be constant.
The expectation that the Fed would soon stop raising interest rates or maybe possibly lower them later in the year has helped explain Bitcoin’s over 70% year-to-date gains.
This is the case because traders prefer to avoid “risky” investments like cryptocurrency when they believe the U.S. central bank will continue to pursue its tight-lipped monetary policy in an effort to keep inflation under control.
Bitcoin price action
The carefully monitored $30,000 milestone was recently challenged once more by Bitcoin, but bulls were unsuccessful.
On May 6, Bitcoin’s (BTC) price hit a low of roughly $28,394 and has since dropped 1.42% to $28,880.
The market has solidly recovered from the historical bottom finding phase of the 2022 bear, according to Glassnode’s most recent weekly analysis.
New investor selling pressure has been a major factor in maintaining resistance at $30,000. The cost base of the youthful supply holders, which is $24,400, may well be a psychological level to watch in the coming weeks, according to Glassnode, should this current slump persist.
