Bitcoin closed the first quarter of 2023 on a positive note with a gain of over 70%. On January 1, 2023, the price of Bitcoin was at US$16,500 and had reached US$29,175 on March 30, 2023.
Ajaib Kripto Financial Expert, Panji Yudha said Bitcoin was able to strengthen amid the continuation of the Federal Reserve (The Fed) interest rate increase at the March 2023 FOMC.
The Fed's decision to implement quantitative easing after the collapse of several US banks which led to increased liquidity has also had an additional impact on the positive catalyst for the crypto asset market.
Entering the second quarter of 2023, Bitcoin has the potential to continue its bullish momentum. Coinglass data shows, from 2013 to 2022 Bitcoin movements in the second quarter experienced an average increase of 8.31%.
“Blockchain data from the Santiment platform shows total Bitcoin holdings in the first quarter of 2023 have increased by more than 2.15 million, to 45.74 million accounts,” he said.
The increase in the number of accounts holding Bitcoin is due to the fact that investors view Bitcoin as a safe-haven asset from the turmoil that has occurred in the banking industry.
The market is also watching for indications that the Fed is starting to ramp up interest rate hikes towards the end of the cycle which also has a positive impact on Bitcoin.
The market consensus is that the Fed is likely to be less hawkish in the second quarter of 2023, which in turn adds liquidity to the crypto asset market.
"Ahead of next year's halving momentum and ethereum Shanghai which will occur on April 12, there is hope to push the crypto asset market higher in the second quarter of 2023," he concluded.
Bitcoin Potential to Strengthen After The Fed Interest Rate Increase
Bitcoin (BTC) strengthened after the Fed's interest rate hike of 25 basis points (bps), building bullish momentum at a price of US$28,000.
Raising interest rates amid the banking liquidity crisis in the United States. Previously, Bitcoin had dropped to the nearest support level in the range of US$26,600 on Thursday (24/3).
Quoted from Coinmarketcap.com On Monday (27/3) at 08.00 WIB, Bitcoin moved up to around the level of US $ 28,000 or strengthened 1.41% in the last 24 hours. The total crypto asset market capitalization also rose 1.42% to USD 1.17 trillion.
"We observe that global investors still see Bitcoin as an asset that can provide protection against inflation, rising interest rates, and the ongoing banking liquidity crisis," said Ajaib Kripto Financial Expert, Panji Yudha.
Bitcoin has the potential to be sideways in the range of US$26,600 – US$28,850 in the short term before testing again at US$29,000.
Based on technical analysis, Bitcoin must be able to stay above the dynamic support of the 20 moving average which is around US$25,225 to be able to maintain the bullish momentum.
Panji said, BTC has increased in value by 17% throughout March 2023. Since early 2023 Bitcoin has shot up more than 65%.
The nature of the scarcity of Bitcoin which has a limited supply of 21 million Bitcoin is one of the advantages of Bitcoin compared to other investment instruments.
In addition, this year is an opportunity for investors to accumulate Bitcoin before the Bitcoin halving momentum which is expected to occur in 2024.
Bitcoin halvings which occur about every 4 years aim to limit the production of new bitcoins by cutting the reward to miners to half of the value of the previous reward. The halving will stop itself when 21 million bitcoins have been issued.
“By halving it can reduce the rate of adding new coins and reduce the supply of BTC in circulation in order to maintain the BTC inflation rate. Historically, the price of Bitcoin is heading for a potential rally when the halving occurs up to one year later," said Panji.
