Bitcoin Bull Run Started In January: 9 Reasons By Charles Edwards

Charles Edwards, renowned analyst and founder of Capriole Investments, outlined nine reasons Bitcoin is in a new bull market since January in a new Twitter thread. Despite growing voices that Bitcoin will crash again, Edwards is bullish.

The first reason is that Bitcoin has come out of a multi-month period of low value as determined by many metrics on the network, including electricity price trading. Historically, this has been the lowest level in the global price of bitcoins. The current bear market was the second longest period that Bitcoin has spent on its electricity cost.

The second reason is the insanely fast recovery from the FTX crash. “We surpassed the price crash of the top 3 scammers in human history in just 2 months,” Edwards said, further explaining that this proves that there are very few margin sellers left.

[A]and the level of deep value was too great to keep prices low for long despite such negative news and financial damage.

There is also important technical confirmation at the most important price level on the Bitcoin chart, a break above $20,000, according to Edwards. The price is of particular importance for five reasons at once: this is the historical high of 2017, the price of the collapse of FTX, the critical level of the block of orders, the border of profitable mining and the psychologically important “round number”.

More reasons to be optimistic about bitcoin

The founder of Capriole Investments also cites the recent massive short squeeze as the fourth reason for the end of the bear market. “We have witnessed a 40% short squeeze with the same characteristics as the bitcoin price bottom that banned mining in China in 2021.”

Moreover, according to Edwards, the price of Bitcoin has entered a new upward momentum mode, which is confirmed by the upward crossover of several long-term moving averages. “Take your pick, almost all daily averages are curving now,” Edwards said.

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He also sees one reason in the bitcoin halving, which he says will be “the most important halving of all time,” as BTC is about to become the world’s hardest asset, overtaking gold as the world’s best store of value. He said the timing of the bottom formation was perfect:

We are at the optimal time for the halving cycle, when bitcoin usually bottoms out (Q4 2022 and Q1 2023). Like a clockwork, Bitcoin bottomed out in the window 12-18 months prior to every halving in the past.

In addition, Bitcoin has already reached its biggest point with a discount in price of more than 80%, he said. “At the end of 2022, sentiment was at its worst and market hedging was at its highest on record. As I tweeted in December, most of the major sentiment indicators for cryptocurrencies and stocks have shown their worst or second worst performance ever.”

Edwards concludes with perhaps the most key reason, although it is probably the most controversial. According to him, already in 2023 there will be a change in the macroeconomic regime. The Fed, according to the analyst, will pause interest rates and change its policy, which would be massively bullish for bitcoin.

The latter point is particularly contentious as the market is now pricing the U.S. Federal Reserve’s “higher for the longer term” interest rate policy after the Consumer Price Index (CPI) and the Personal Consumption Price Index (PCE) fared much worse than expected.

As a result, at the time of writing, the price of Bitcoin continues to struggle against its key support at $23,300.

Bitcoin BTC USD
Bitcoin price, 4-hour chart | Source: BTCUSD on
Featured image by Hans Eiskonen / Unsplash, Chart from

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