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Bitcoin, the crypto market leader, is priced at $22,776.30 today. Its price fluctuations are indicative of how recent pitfalls in the crypto market have not even spared Bitcoin. This is a challenging time for investors as they are debating whether or not to trust Bitcoin again.
Here’s a closer look at how Bitcoin has been affected by the crash of the crypto market.
Bitcoin Price Shows Signs of a Late-January Low
The price of Bitcoin today bears stark similarities to its low point at the end of January this year, at $22,776. Its price charts clearly show that after a period of slow growth, it is falling. After its low point on January 30, it gained some momentum until February 1, 2023. Bitcoin price was at $22,720.1 on February 6, but managed to rally a bit before hitting a low of $22,737 on February 8. February. . Given this current trend in its price movement, is it safe to assume that the decline we see today is calm before the bullish storm?
“Golden Cross”: how well can we trust it?
On February 6, Bitcoin closed on the “golden cross” that caught investors in the crypto market in anticipation. This phenomenon occurs when a short-term moving average (SMA) exceeds a long-term one. A price charting technique, “golden cross”, is often an indication that a bull market is coming. This rare occurrence occurred after 18 months.
There is a possibility that a bull market is coming. We say this because the last time we witnessed the “golden cross” was in September 2021. And two, long after it happened, the price of Bitcoin reached an all-time high.
The question is can investors trust the “golden cross”? Or is it just an ideal textbook scenario? It is too early to say if the “golden cross” can drive the price of Bitcoin to another all-time high.
Previous causes chaos in the crypto market
The crypto market is known for being directly proportional to even small changes that occur in the economy.
Recently, Jerome Powell, the Chairman of the US Federal Reserve, caused a stir in the cryptocurrency market while giving a speech on inflation and the present and future of the US economy. In his speech, he said that the disinflation of the economy is still in its early stages. After the turbulent fall in cryptocurrency prices following the US unemployment news, Powell’s words provided some much-needed relief to investors.
Jerome emphasized that the deflation process will not be easy. There is a possibility that the Fed will raise interest rates again if labor markets continue to be strong. His words caused the price of Bitcoin to skyrocket around $23,000.
However, shortly after his speech, the market witnessed a crash.
Naeem Aslam, chief market analyst at AvaTrade, hinted that the interest rate could be closer to 5%.
In the past, Grayscale has also caused problems in the Bitcoin market. Grayscale is the world’s largest bitcoin fund and its sale has had some repercussions.
Bitcoin growth over the past 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 whole 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 got going with the mining of the genesis block, and as they say, the rest is history.
According to a note that was on the block, bitcoin is believed to have been created in the aftermath of the great financial crisis of 2008.
The bitcoin price increased 10000 times, the first time in 2011 when the price increased from just $0.3 to $30. But it soon fell back to $5 at the end of that year. This definitely gave an idea of its future valuation and what investors stand to gain.
The year 2012 paved the way for further growth of Bitcoin after its first appearance. It caused a reduction in mining reward and increased competition, resulting in future growth.
The Bitcoin price experienced another major milestone in 2013. The crypto market witnessed the biggest gain of close to 7,000% when the Bitcoin price peaked at over $1,100, with a market cap of $1 billion. This was equally motivated by a sudden rise in cryptocurrency.
Bitcoin’s growth did not attract much attention during the following years. However, the crypto industry continued to grow at full speed, further fueled by advancing technology, awareness and investments in cryptocurrencies, and innovations such as proof-of-stake and smart contracts. Amid this, the price of Bitcoin was stable, averaging around $300. However, near the end of 2017, Bitcoin hit five figures and hovered around $20,000.
During the pandemic, when the third one took place, he reduced the mining reward to $6 coins. And the price of Bitcoin saw an increase, ending the year at $40,000. The growth is also believed to have been driven by institutional investors and a increased use by corporations and businesses.
It was during this time that governments, investors, and central banks around the world began to focus on cryptocurrencies, resulting in intense scrutiny and strict regulations in the cryptocurrency market. However, none of these factors really affected the price of Bitcoin.
What does the future hold for Bitcoin and for us?
Bitcoin’s rise and fall since 2009 is indicative of its strong foundation. It shows, time and time again, that Bitcoin is here to stay. Yes, the price of Bitcoin over the years has been marked by highly volatile and erratic market trends. But it has also climbed a steady chart if you consider a decade analysis. Yes, the price of Bitcoin sways and fluctuates with external factors, the health of the economy, competition from other emerging cryptocurrencies, and public opinion on Twitter. But at the same time, it continues to grow and prove profitable for businesses, corporations, and investors around the world.
The downfall of many crypto companies, recent bankruptcies, and the unfavorable market of 2022 have definitely shaken things up in the crypto market. But despite this, Bitcoin is here to stay and take advantage of investor confidence again.
Is it a good idea to invest in Bitcoin right now?
Investors and crypto market analysts share a pessimistic view of bitcoin. Many predict that its price will touch $25,000 after the recent “golden cross”. However, there are some industry experts who assume that if the market continues to be volatile, the price of Bitcoin may fall close to $21,000. If the Federal Reserve ends up raising the interest rate, it will definitely cause bitcoin’s value to rise.
In times of such uncertainty, investors tend to move towards safe investment options.
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