Bitcoin And Crypto Are Suddenly Braced For A $1 Billion U.S. Earthquake After Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon And Solana Price Surge
04/05 update below. This post was originally published on April 3
Bitcoinbitcoin , ethereumethereum and other major cryptocurrencies rocketed higher over the first quarter of 2023, making bitcoin the best-performing asset by a significant margin and putting crypto at a “pivotal moment.”
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The bitcoin price has almost doubled from its late 2022 lows as the market bets the Federal Reserve could be about to flip dovish (though the world’s largest asset manager has issued a serious warning). The etherem price has surged along with bitcoin and other top ten cryptocurrencies BNBbinancecoin, XRPripple, cardanocardano, dogecoindogecoin polygon and solanasolana.
Now, after the U.S. dumped $215 million worth of seized bitcoin on the market last month, bitcoin and crypto traders are braced for the sale of just over $1 billion worth of bitcoin later this year.
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04/05 update: The bitcoin price has continued to tread water over the last week, failing to break above $30,000, with traders now looking at Friday’s looming U.S. jobs report as potentially triggering the market’s “the next big move.”
“The former cryptocurrency is stuck in local highs, above which it has been unable to consolidate since March 19,” Alex Kuptsikevich, FxPro senior market analyst, said in emailed comments. “This prolonged consolidation sets the stage for the next big move. The resolution of this consolidation is likely to be linked to the market’s reaction to Friday’s non-farm payrolls. Technically, a pullback to the $27,000 level to correct the rally of March 10 is more likely at the moment.”
Friday’s non-farm payroll data is expected to show the red-hot labor market continued to cool. However, if the print comes in higher than forecast, it could mean the Federal Reserve renews its push for higher interest rates, further sucking liquidity out of the system. This week, Federal Reserve Bank of Cleveland president Loretta Mester’s warned the Fed should hike interest rates above 5% and hold them there for longer than most investors would like.
The almost 10,000 bitcoin sold by the U.S. government in March is part of a haul of 50,000 bitcoin seized following the arrest in November of James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system of the darknet market Silk Road in 2012—claimed to be the latest ever bitcoin seizure.
The remaining 41,000 bitcoin—worth $1.1 billion—are “expected to be liquidated in four more batches over the course of this calendar year,” according to the court filing.
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 almost 10,000 bitcoin.
The move spooked the market and raised eyebrows among analysts as the U.S. has historically preferred selling seized bitcoin and crypto via public auctions.
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The bitcoin and crypto market is also closely watching for any sign of how the U.S. Federal Reserve to act when it next meets to decide interest rates in early May.
“With concerns for the U.S. banking system subsiding, the market’s concern is yet again on the Fed’s rate hike decision in May,” Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said in an emailed note and pointing to economic data that has come in surprisingly hot in recent weeks.
“Bitcoin could 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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