Bitcoin, the world’s largest and most popular cryptocurrency, continues to rise in 2023. Over the weekend, the price hit its first high of $21,000 after FTX and Alameda Research’s crypto market collapse. It traded as high as $21,360 on Sunday.
It is still far from November 2021 high of $69,000. However, this has given markets some hope. Since the beginning of January, the token has increased by approximately 27%. According to CoinDesk, it was recently at $21,291, up about 2% from its level 24 hours ago.
According to data from CoinGecko, the total market value of all cryptocurrencies surpassed the $1 trillion mark for the first time since early November. That was once worth about $3 trillion before Bitcoin crashed.
With a market capitalization of more than $409 billion, BTC currently controls about 40% of the total market share. While Ethereum is the second number, making up 18.3% of the crypto market. The value of the ETH market has increased by over 30% this year and is currently trading at $1,570, according to CoinGecko.
Bitcoin’s New Year’s rally is fueled by several factors, including buying by large buyers known as “whales” and the growing prospect of interest rate cuts.
According to a senior market analyst at OANDA, Craig Erlam, Crypto has been the “biggest winner” in the current period of increasing risk appetite. He warned that it remains unclear whether this is a real resurgence or a brief recovery.
Reduction In Inflation And “Whales” Triggered Bitcoin Price
U.S. inflation is cooling down as the consumer price index fell 0.1% from November to December 2022. Investors believe this drop will likely put pressure on the US Federal Reserve to reverse interest rate hikes.
The central banks and Fed have raised interest rates over the past year to counter rising inflation and have significantly downgraded stocks and cryptocurrencies in 2022. The Fed is currently expected to cut interest rates, easing some of the pressure on risky assets.
According to Kaiko, buyers of crypto assets also called “whales” may be one of the causes of the latest increase in bitcoin price.
Trading volume on crypto exchange Binance rose from an average of $700 on January 8 to $1,100 today, signaling a resurgence of whale interest in the crypto space, a crypto data firm said on Monday.
Edul Patel, CEO and Co-founder of crypto firm Mudrex, said BTC is currently hovering around $21,000, which has remained relatively stable over the past 24 hours. It has already been up an impressive 25% this year.
This surge is likely driven by renewed investor confidence in the U.S. central bank’s ability to control inflation without harming the economy. Ether, following a similar pattern to Bitcoin, has also seen an increase in value, reaching a two-month high before falling slightly. On the other hand, MANA, the native token of the 3D virtual reality platform Decentraland, has increased by more than 16%.”
Bitcoin is considered digital gold in present times. Many crypto experts predict that the price may rise in 2023. The average BTC price forecast is $30,000 for this year. At the same time, analysts predict that Bitcoin could trade for $200 million or more by 2025.