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Charles Edwards, founder of the Capriole Fund and Bitcoin analyst, sees a major catalyst that could boost Bitcoin’s price in 2023. 2022 has been a tough year for cryptocurrencies, marked by falling prices after the Fed implemented tightening monetary policy through rate hikes.
Most recently, the Federal Reserve raised interest rates by 25 basis points on Wednesday, causing cryptocurrency prices to drop. The Fed has now conducted a steady barrage of 10 straight rate hikes since March 2022 to dampen an overheated economy and check skyrocketing prices.
Edwards, in a new tweet, expressed the possibility that interest rates may not rise because the system is on the brink of collapse.
He tweeted, “The only way the Fed can compete with Bitcoin is through higher interest rates. But interest rates cannot go higher because the system is collapsing. The settlement will be relentless.”
The idea that the Fed would soon pause rate hikes, or possibly cut rates later in the year, has contributed to Bitcoin’s over 70% of year-to-date gains.
This is because traders tend to stay away from “risky” investments like cryptocurrencies when they expect the US Federal Reserve to maintain tight monetary policy to curb inflation.
Bitcoin Price Action
Over the past week, Bitcoin made another attempt to surpass the closely watched $30,000 level, but the bulls were unsuccessful.
Bitcoin (BTC) price fell to lows around $28,394 on May 6 and has remained down 1.42% in the past 24 hours at $28,880.
According to Glassnode’s latest weekly report, the market has made a significant recovery from the bear’s historic 2022 bottom-finding phase.
Selling pressure from new investors is now a key driver that has built resistance at $30,000. Should this current correction continue, the $24,400 young holder cost base could well be a psychological level to watch in the coming weeks, Glassnode said.
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