Baystreet.ca – Bitcoin Weekly: Recovery time questionable
Bitcoin (BTC-USD) held the $43,000 level last week after recovering from a brief decline last Tuesday to $42,000. Looking at the monthly chart, the leading cryptocurrency is showing an upward trend. It benefited from several tailwinds that markets may have priced in.
The SEC approved spot Bitcoin, leading to a surge in retail purchases. Others took advantage of his rise. FTX, a bankrupt crypto exchange, sold 22 million shares of Grayscale Bitcoin Trust (GBTC) worth $1 billion. FTX is no longer involved in the ETF.
The Federal Reserve meeting on January 30th and 31st is another headwind for BTC. The central bank did not cut interest rates last Wednesday, nor has it announced it will do so next month in March.
Prolonged higher interest rates reduce the attractiveness of cryptocurrencies. Savers can park their currency in fixed income securities to earn at least 5.0% instead.
Bullish analysts
Coinbase (COIN) analysts are optimistic about the prospects for Bitcoin. They assume that the selling pressure of the last few weeks will ease. This assessment will have an impact when sellers become exhausted. Unfortunately, the US Dollar Index (UUP) bottomed at $26.95 on December 27, 2023. Trading near $28, a breakout to $29-$30, a level not seen since last year, would undermine the bullish BTC argument.
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