Since the beginning of 2023, the price of Bitcoin has risen by nearly 40%, from 16000 dollars to 23000 dollars. In contrast, the S&P 500 index rose nearly 6% this year and the Nasdaq 100 index rose more than 10%.
As of press release, the price of Bitcoin was $22980, up 0.14% in 24 hours. Since the low of $15476 in November last year, Bitcoin has rebounded more than 48.49%.
However, looking back at the cryptocurrency industry, many cryptocurrency platforms such as Coinbase, Crypto.com, Genesis, and Matrixport announced layoffs at the beginning of this month, and the business seems to have not improved.
The combination of multiple factors contributed to the surge
For the recent rise, John Reed Stark, a former Internet law enforcement officer of the United States Securities and Exchange Commission, quoted Forbes' analysis of 157 cryptocurrency exchanges in a social media article and concluded that "market manipulation" has played a huge role in the recent recovery of Bitcoin, because about 50% of the daily trading volume of Bitcoin is "false".
However, John Reed Stark's view was refuted by the encryption community. Mike Novogratz, CEO of Galaxy Digital, said that the recent rebound in the encryption market was mainly due to two factors, one is the rapid injection of liquidity into the market by the Bank of Japan, and the other is that Hong Kong, China, began to embrace cryptocurrency and blockchain technology again, which is "a narrative worthy of attention in 2023".
Cai Kailong, a financial science and technology expert, told the NEWS reporter that the Federal Reserve would not continue to increase interest rates in the future, and may even change to not increase interest rates this year. The biggest adverse macro factors have been eliminated; The negative impact of the rise of NASDAQ technology stocks and the explosion of large institutions in cryptocurrencies has been gradually eliminated. The combination of these three factors has driven the recent rise of cryptocurrency.
It is worth mentioning that the newly released consumer price index of the United States has changed from positive to negative to - 0.1% for the first time in nearly two years. Therefore, the outside world is optimistic that the Federal Reserve will slow down the rate of interest rate increase, and it is widely expected that the pace of interest rate increase will slow down.
In order to alleviate the impact of inflation, the Federal Reserve has raised the US dollar interest rate seven times in 2022. By December 2022, after raising the interest rate, the federal funds rate reached 4.25% to 4.5%, the highest level since 2007. High interest rates represent higher investment costs, leading to volatility of risky assets such as stocks and cryptocurrencies.
Another factor that cannot be ignored is that Bitcoin will halve the output in 2024, that is, the reward of Bitcoin obtained by miners mining, which means that Bitcoin output will become slower.
Bitcoin will be halved every four years. According to past experience, the price of Bitcoin will increase in varying degrees due to the reduction of supply after halving. With regard to the predictable price rise and the fact that Bitcoin has just fallen to the low point in recent years, it is impossible not to attract investors.
In the view of Jiang Zhuoer, CEO of Leibit Mining Pool, if the lowest point of the bear market in 2022 is the price of Bitcoin after the FTX thunderstorm is 15476 dollars, the time from the highest point of the three bear markets to the lowest point is very close, and the four-year cycle rule caused by the halving of Bitcoin in four years is still unbreakable.
Jiang Zhuoer told the NEWS reporter of the Yuan Universe that from the perspective of market sentiment, it is now the last horizontal period of the bottom of the bear market of cryptocurrency, and the possible thunderstorms such as the cryptocurrency institution DCG have become a clear card. He has said that the pricing of the future expectation will not have a significant impact on the currency price.
Is it a rebound or a bear market trap?
However, it is worth noting that since the rebound in early January 2023, investors suffering from the bear market have all hoped to "settle down".
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