Cryptocurrency

As Bitcoin price steadies, this analyst cautions about crypto spring hopes

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Bitcoin price is hovering at the $30,000 resistance level as investors assess the latest American inflation data and the positive FOMC minutes. BTC has soared by over 93% from its lowest level in 2022, making it a better performer than gold, stocks, and other assets.

Fed pivot hopes

Bitcoin and other altcoins have done well as hopes that the Fed is nearing the peak of its hiking cycle amid rising recession risks. On Wednesday, data showed that the headline inflation dropped to 5.0% in March, the lowest point since 2021.

Other economic numbers have been relatively weak of late. Last week, data from both ISM and S&P Global showed that the manufacturing and services PMIs declined in March. The manufacturing sector is doing much worse even as more companies shift their production to the US.

Meanwhile, data published on Friday showed that wage growth continued dropping even as the unemployment rate dropped to 3.5%. 

Therefore, there is a possibility that the Fed is nearing the end of its hiking cycle. In fact, minutes published on Wednesday showed that some Fed officials supported pausing rate hikes to observe the situation in the banking sector.

“Several participants emphasized the need to retain flexibility and optionality in determining the appropriate stance of monetary policy given the highly uncertain economic outlook.”

Therefore, with Fed pricing in a recession and yield curve being inverted, there is a likelihood that a pivot will come soon.

Crypto spring hopes

Bitcoin price remained in a crypto winter during the aggressive phase of Fed tightening. Now, there are hopes that we will move to a crypto spring as the monetary conditions rise. In an interview on Tuesday, Mike Novogratz said that these actions of the Fed could push more people to crypto. He expects that BTC price will retest its all-time high.

In a statement, Andrey Stoychev, the Project Manager at Nexo said he believes that a crypto spring seems to be starting. He cited the recent implosions of key banks like Credit Suisse and Silicon Valley Bank. Regarding the next prices to watch, he said:

“Now at $30K, we are close to the $32K threshold for the asset. Historically, we’ve seen resistance at $31,000- $32,500. If BTC passes $32.5K, we could potentially be on the way to $34-38K. While spring is an unpredictable season, and it’s still early to completely call off “crypto winter’, these are favourable signs for the crypto space.”


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