Bitcoin Surges Past $30,000 Mark

by Alex Benfield
By Alex Benfield

Slowly but surely, crypto continues to climb as 2023 ticks on.

After over a year of nothing but downward price slides, the crypto market has finally strung together multiple months of upward progress.

In fact, Bitcoin (BTC, “A-”) burst past $30,000 late Monday evening after a month of trying to break out of its trading range.

This is the first time BTC has been above $30,000 since June 2022.

In other words, the rally at the start of this year has erased more than two quarters of the 2022 bear market. Not bad at all.

Before yesterday’s breakout, Bitcoin was trapped in the $27,000–$29,000 range for over three weeks and seemed to be trading sideways after losing momentum. But this recent move up changes the outlook of this year’s price action.

In the chart below, you can clearly see an upward trajectory that started last November but really picked up steam in January when we started the year at around $16,500.

That rally cooled off in late February and March before bursting upward in mid-March to today's level of $30,000.

That is an impressive growth of 82% year to date.

Source: Coinbase Global (COIN).
Click here to see full-sized image.

 

There are a few different reasons to be excited about this week's price action. And there is hope that things might continue to trend upward for the foreseeable future.

To start, the Consumer Price Index inflation data was released today, with the March CPI coming in at 5% — 0.1% lower than expected.

Since inflation appears to be trending lower now, investors may feel more comfortable holding riskier assets such as Bitcoin.

Also, a weaker U.S. dollar resulting from lower inflation could make Bitcoin more attractive to investors seeking to diversify their portfolios and hedge against currency fluctuations.

Additionally, the recent CPI data could potentially give the Federal Reserve the reasoning it needs to stop the interest rate hikes … or even pursue cut rates.

Lower interest rates would make it cheaper for investors to borrow money to invest in assets like Bitcoin. It could also reduce the opportunity cost of holding Bitcoin, especially if returns on other investments are relatively low.

The other big news item that can impact price action is the Ethereum (ETH, “B”) Shanghai upgrade, which is taking place today.

This means all the ETH that has been staked since the rollout of ETH 2.0 will now be available for withdrawal for the first time.

Some investors are bearish, as they see this as an opportunity for stakers to withdraw their funds and sell their ETH that has been locked up for the entire bear market.

Others — including myself — view this as a positive sign for the market. That’s because the Shanghai upgrade will make staking ETH more attractive since investors who were previously hesitant to stake their ETH due to the lack of a withdrawal option will now be able to do so with confidence.

We will see what the consensus is over the next few days as the price of ETH fluctuates. But my gut tells me it is going up in value between now and next week.

Currently, ETH is trading just north of $1,900 and is sitting just under that key resistance level of $2,000.

Despite lagging behind Bitcoin for most of the year, Ethereum’s price chart for 2023 has an incredibly bullish look to it.

Recently, ETH appears to be picking up some momentum, so this Shanghai upgrade could be the catalyst it needs to push it even higher.

Source: Coinbase.
Click here to see full-sized image.

 

Overall, the crypto market is gaining momentum in 2023, and Bitcoin's breakout is a promising sign for investors.

This move could translate over into the altcoin market sometime soon, but we will need to keep an eye on Bitcoin dominance before we can confirm that.

As always, we will continue to monitor developments and report any updates here, so stay tuned.

Best,

Alex

About the Crypto Analyst

Alex has been actively researching and investing in cryptocurrencies since 2017. He contributes research and reports to several Weiss crypto publications, with a primary focus on helping to create crypto trading strategies.

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