Bitcoin notched an optimistic rise to $17,500 on Jan 11, propelling it to a peak in the last three weeks. A glimpse of a new strength that has been missing in the market. This new height has bulls control of the $275 million BTC weekly options expiry on Jan.13, as bears had staked at $16,500 and lower.
On Bitstamp, BTC/USD are reaching new local highs of $17,504. Rattled by the volatility endured last year, traders have reacted slowly to this rare upside momentum. However, permabulls and dip-buyers project that the long-endured crypto winter might finally disappear.
Investors expect a temporary response to the forthcoming macroeconomic data to be released by the United States. Scheduled to be unveiled on Jan 12, the Consumer Price Index (CPI) print is eyed to propel the plot that inflation is finally nosediving, creating a possible spectrum of opportunity for risk assets.
Details about Bitcoin’s spike
In the last nine days, Bitcoin’s prolonged rally has lightened up the cheeks of crypto enthusiasts. Bloomberg reported that the token has advanced for nine days— the most prolonged spell since 2020. Whispers about a definitive rise in the crypto market have grown wands on several lips; however, many believe that the Federal Reserve will act cautiously. In contrast with last year’s disappointing spell, Bitcoin’s recent spike signals a massive difference.
“Institutions may make a comeback once the issues overhanging the digital-asset market clear up, according to Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. She added, “There is little doubt that large players will come back into the market when the outlook is less murky, pushing up transactions and price.”
Bitcoin was up 4% to trade at $18,258 as of 10:15 a.m. in Singapore. It has added over 10% this month. Ether, the second largest token in the world, has also added 17%. It climbed over 4%, while Avalance enjoyed a spike of 9%. The market outlook is changing with this recent-spirit lifting spike in prices. However, there has been a mixed reaction from different corners:
“The real break out or dump will come on Thursday when CPI data is released,” popular trader Johnny summarized on Twitter. A subsequent post cautioned on “bull tweeting as $BTC sits under higher time frame resistance at $17,600,” with Johnny previously urging followers not to “feel the urge to FOMO, especially this week.”
“CPI this week could whipsaw the prices back to where they were last week,” he argued.
What should traders know?
The hope of a resurgence is the feasibility of the U.S. Federal Reserve stopping its interest rate spike in the first quarter of 2023. With the CPI bound to be released on Jan 12, there will be more clarity about the central bank’s stride to slow the economy’s pace and minimize inflation.
Crypto traders worry that Bitcoin may repeat the $15,500 bottom if there is a future decline in the regular markets. For instance, Morgan Stanley’s chief investment officer and chief U.S. equity strategist, Mike Wilson, told investors on CNBC to brace for a winter downdraft and warned that the S&P 500 index is vulnerable to a 23% drop to 3,000. Wilson added, “Even though most institutional clients think we’re probably going to be in a recession, they don’t seem to be afraid of it. That’s just a big disconnect.”
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!