Bitcoin and crypto are suddenly set for a $1 billion earthquake in the US after the price increase of Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon and Solana
04/05 update below. This post was originally published on April 3
Bitcoin, ethereum, ethereum, and other major cryptocurrencies shot higher during the first quarter of 2023, making bitcoin the most efficient asset by a significant margin and putting crypto at a “pivotal moment.”
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Bitcoin price has nearly doubled from late 2022 lows as the market bets that the Federal Reserve may be about to turn dovish (although the world’s largest asset manager has issued a dire warning). Ethereum price has risen along with bitcoin and other top ten cryptocurrencies BNBbinancecoin, XRPripple, cardanocardano, dogecoindogecoin polygon and solanasolana.
Now, after the US dumped $215 million worth of seized bitcoins on the market last month, bitcoin and crypto traders are bracing for just over $1 billion worth of bitcoin sales later this year.
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04/05 Update: Bitcoin price has continued to tread water this past week, failing to break above $30,000, with traders now eyeing Friday’s looming US jobs report as potentially triggering the market’s “next big move.”
“The former cryptocurrency is stuck at local highs, above which it has not been able to consolidate since March 19,” Alex Kuptsikevich, senior market analyst at FxPro, said in an emailed comment. “This prolonged consolidation sets the stage for the next big move. The resolution of this consolidation will likely be tied to the market’s reaction to Friday’s non-farm payrolls. Technically, a pullback to the $27,000 level to correct the March 10 rally is more likely for the moment.”
Friday’s non-farm payrolls data is expected to show that the red-hot labor market continued to cool. However, if the print comes in higher than forecast, it could mean that the Federal Reserve is renewing its push for higher interest rates, further draining liquidity from the system. This week, Federal Reserve Bank of Cleveland president Loretta Mester warned The Fed should raise interest rates above 5% and keep them there longer than most investors want.
The nearly 10,000 bitcoins sold by the US government in March are part of a seizure of 50,000 bitcoins seized following the November arrest of James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system to the darknet market Silk Road. in 2012 – claimed to be the last ever bitcoin seizure.
The remaining 41,000 bitcoins – worth $1.1 billion – are expected to be liquidated in four more batches during this calendar year, according to the court document.
In March, it was noticed that bitcoin in wallets associated with the seized Silk Road funds had been transferred to a Coinbase address, which received nearly 10,000 bitcoin.
The move spooked the market and raised eyebrows among analysts as the US has historically preferred to sell seized bitcoin and crypto via public auctions.
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The Bitcoin and crypto markets are also watching closely for signs of how the US Federal Reserve will act when it next meets to set interest rates in early May.
“With concerns that the US banking system is slowing down, the market’s concern is once again linked to the Fed’s decision to raise interest rates in May,” Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said in an email, pointing to economic data that has come surprisingly warm in recent weeks.
“Bitcoin may retest $29,000, but it needs to close above that level to call it a ‘breakout’, otherwise it could be another ‘fake-out,'” Hasegawa added.
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