Bitcoin (BTC) starts the last week of January in fine form after sealing its highest weekly close in five months. Despite opposition, the largest cryp
Bitcoin (BTC) starts the last week of January in fine form after sealing its highest weekly close in five months.
Despite opposition, the largest cryptocurrency is holding on to its newfound strength and continues to surprise market participants.
This is no mean feat — market sentiment has plenty to spook it and initiate a rethink among investors. Macro conditions remain uncertain, while within Bitcoin, research has highlighted whales on exchanges potentially moving prices artificially with huge amounts of liquidity.
Nonetheless, Bitcoin has seen its most impressive gains percentage-wise in over a year, and hopes remain that the good times will endure. What could that depend on?
Cointelegraph takes a look at some of the major factors to keep in mind as a January unlike any other draws to a close.
Bitcoin analysts bank on “continuation” to come
It is no secret that Bitcoin is facing its fair share of suspicion as it delivers 40% gains over just three weekly candles.
Demands for a major correction and continuation of the bear market have long been public, and some of the more conservative trading voices insist that macro lows are not yet in.
That inflection point has still not materialized, however. At its latest weekly candle close, BTC/USD traded at just above $22,700, marking its best performance since last summer.
Thereafter, the pair consolidated into the start of Monday, likewise retaining ground recovered over the week.
“Lows swept, juicy highs above, would be the perfect time to put in a nice running flat before continuation up,” trader Credible Crypto summarized about the short-term outlook.
Credible Crypto’s is characteristic of some of the more bullish takes on the market, less concerned by the idea that the whole move may simply be a relief rally within a broader bearish structure.
“Total market capitalization broke through the 200-Day EMA,” a similarly optimistic Michaël van de Poppe, Cointelegraph contributor and CEO of trading firm Eight, added at the weekend, referring to exponential moving averages.
“Good signs for crypto, as continuation seems likely. In between continuation to $25K or a correction to $19.5K. To continue -> hold above 200-Day EMA and break resistance. 200-Day EMA potential entry point.”
The 200-day EMA stood at $21,056 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
More conservative appraisals of the situation focused among other things on exchange order book composition.
In its latest analysis, Material Indicators noted BTC price action rising and falling as major area of bid liquidity came and went on Binance.
“The BTC buy wall at 20,200 has been moved to push price up to test resistance on the trend line,” part of commentary stated.
“I don’t trust this entity at $22k any more than I did at $20k, but happy to trade in their wake.”
A further post doubled down on a previous assertion that price action was being “choreographed” and giving no attention to surrounding industry news, notably the bankruptcy of crypto lending firm, Genesis Trading.
“Fundamentally nothing has changed, yet BTC is testing macro level resistance. Meanwhile, some of the largest institutions in crypto are headed for bankruptcy. Probably nothing,” Material Indicators tweeted.
Macro optimism creeps back in
Macro analysis shows a similar split among those involved in crypto markets themselves.
With the United States Federal Reserve’s latest decision on interest rate hikes due Feb. 1, sources are reading into falling inflation in increasingly diverging ways.
Meanwhile, the 2023 World Economic Forum, despite some crypto opposition, failed to dent sentiment significantly.
For Dan Tapiero, founder and CEO of 10T Holdings, it is simply a question of how bullishly risk assets will respond to changing tides at the Fed as it loosens monetary policy in future.
“How will Fed respond when inflation goes below 0? A long good year coming for BTC ETH gold,” he told Twitter followers.
“USD bear mkt and 10yrs below 3% to support main trends. Digital asset ecosystem (DAE) to thrive as clearing prices reached without government support. Free markets work!”
That position is conspicuously unlike some other popular takes, in particular last week’s predictions from ex-BitMEX CEO, Arthur Hayes. The Fed pivot on rates, he warned, will come with dire losses for crypto before the recovery sets in.
Credible Crypto, meanwhile, also sees no reason not to be bullish on risk assets now.
“Talks of rate hikes slowing to 25 basis points as inflation decreases for 6 consecutive months, meanwhile the $SPX has made a picture perfect retest of prior ATH and looks ready to head back up. All that panic and fear, for what?” he queried on Jan. 23.
The last week of the month meanwhile…
cointelegraph.com