2022 was notably, a terrible year for the cryptocurrency industry. Bitcoin, Ethereum, and other assets witnessed a major slump with crypto-related firms going bankrupt. While Bitcoin restored hope in the community by rising to a high of over $25K in 2023, the Bank of America believes that this trend could persist.
A recent BOA report noted that 2023 could be “the year of token price divergence.” In addition, the report pointed out that the price wasn’t the only aspect that would witness a pump. Price divergence was attributed to “tokens that provide utility and a call on cash flows outperforming meme and governance tokens.”
Price divergence is often a bullish indication as it marks the end of a downtrend. The entire globe is aware of the slump the crypto industry was in throughout the past year.
However, big-cap assets like Bitcoin & Ethereum are strongly impacted by macroeconomic factors. Strong economic indicators have pushed the timing of a recession, but they also suggest the possibility for reflation and future rate hikes, according to Bank of America analysts. Therefore, these analysts remain cautious about growth.
Can Bitcoin reclaim its 2021 all-time high levels this year?
Even though 2023 started on a good note for the industry, Bitcoin was struggling to make it past $25,000. Several in the community have been vouching for the asset to attain its short-term goal of $30K. But its existing resistance levels seemed to be quite strong. This, however, doesn’t mean that a new all-time high was a lost cause.
The next Bitcoin halving is expected to occur in early 2024. A majority of the crypto community believes that this could push BTC above its ATH of $68,789.63. At press time, Bitcoin was trading for $23,410.17 with a 0.11% daily drop.