BTCST Price Outlook for 2023
What is the 2023 outlook for the BTCST price?
Recent events in the US banking sector and their implications on the Fed's monetary policy could be the spark that the BTCST price needs to recover. This article sheds light on what has happened with the BTCST price so that you can find answers to these questions yourself.
BTCST price history at a glance
Currently priced at $0.65, the BTCST token is attracting decent daily trading volume. For a token that was once priced at 90 USDT and had even hit a high of 92.53 USDT, the token's price may come as a wonder to many HODLers. How did this token fall so steeply within a two-year time frame?
As with all the crypto tokens that have some exposure to Bitcoin, the Bitcoin Standard Hashrate Token took a massive hit when the crypto winter was triggered by the Omicron variant of COVID-19 in November 2021. But before then, there had been warning signs. After the token's listing on some exchanges in April 2021, it surged massively, rising 300% from its mid-May 2021 price to a peak of 92.53 USDT.
What followed was a massive sell-off later that month, shaving 80% off the all-time high price. However, a technical double-bottom pattern on the weekly chart heralded its best recovery run to date, sending the BTCST price from a low of 15.55 USDT to a high of 90.99 USDT in the first week of October 2021. But following the retracement from that move, the Bitcoin Standard Hashrate Token has dropped like a rock into the ocean, taking any long positions on the BTCST/USDT pair underwater, where it has remained ever since. At $0.66, the token is trading at its lowest points ever, sinking even below the April 2021 listing lows.
Is there a silver lining for BTCST?
The Omicron effect has since waned. That variant did not cause severe disease among the population. What pushed the crypto market down in 2022 was the cycle of monetary policy tightening by central banks, particularly the US Federal Reserve. The stablecoin Tether (USDT) shares parity with the US dollar, so it has primarily benefited from the Fed's rate hikes to the detriment of risky assets paired with it, such as Bitcoin and BTCST.
Inflation data for January 2023 pointed to further escalation when it was released on 14 February 2023. The data showed that the annualized consumer price index in the US beat estimates of 6.2%, rising to 6.4%. The headline number showed a print of 0.5%, beating December's figures which showed a contraction of 0.1%. Core CPI rose from 0.3% in December to 0.4% in January.
This data, combined with the hawkish testimony of Fed Chief Jerome Powell before the US Senate Banking Committee and the House Committee on Financial Services on 7/8 March, raised the odds of the Fed moving from its previous 25 basis points rate hike to a 50 bps rate hike come 22 March. A further rate hike of this magnitude is expected to lead to further depression of crypto prices and gains for USD-denominated assets. This was the market view until 9/10 March, when everything changed.
The markets woke up to the collapse of Silicon Valley Bank (SVB) after a combination of liquidity issues, a fall in bond prices (to which the bank was heavily exposed), and panic-laden tweets fuelled a run on SVB that led to the withdrawal of $42 billion in a single day. A second bank, Signature Bank, was also in trouble. The contagion has spread, leading to a collapse in banking stocks in the US, Europe, and Asia. The US dollar is broadly weak, and suddenly, the bets for a rate hike by the Fed are off.
If the Fed fails to raise interest rates, it will be the first time in nearly 10 months that this will happen. It could dwindle interest in USD-denominated assets and lead to renewed market interest in risky assets such as cryptos. The signs are already there. USD coin (USDC), a popular USD-backed stablecoin, briefly lost its peg with the greenback and traded at 88 cents. The peg has not fully recovered on several exchanges.
BTCST price potential
For a coin that had traded as high as $90, a $0.65 price is an attractive proposition. There is long-term potential for the BTCST token. The Bitcoin Standard Hashrate Token shares a mild correlation with Bitcoin. Bitcoin prices tested the 25K resistance earlier in the year but failed to break it. The recent banking crisis caused the BTC/USD pair to push this boundary northward, testing the 26,000 price level before it beat a retreat. At current price levels, another retest of 25K is close.
A more sustained push above 25K raises the chances of recovery of the crypto market and altcoins that are correlated with Bitcoin in particular. This scenario could prompt an uptick in the BTCST price, bringing smiles to the faces of long-suffering HODLers. Several factors need to come together to make this work.
Volumes on the buy side are still low. But if buying volume rises and Bitcoin gets an uplift above 26K, the token may be on its way to recovery.
Author: Eno Eteng
Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about cryptos, FX and CFDs. Since 2009, he has been a consultant for several companies in the financial market space. His work can be seen on several forex and crypto-related blogs and trading educational websites.