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Bitcoin has been gaining momentum since early 2023. The world’s first and largest cryptocurrency by market capitalization last traded near $21,000, up a staggering 27% so far this month. This means Bitcoin is making its highest monthly profit since October 2021.
In light of the recent surge, Alternative.me’s popular Bitcoin fear and greed index jumped out of “fear” over the weekend for the first time since April 2022, hitting 52 before returning to 45 on Monday.
The recent rally has drawn the usual predictable skepticism from social media bears, many of whom dismiss Bitcoin’s recent rally as a “bull trap.” In all fairness, our strategy for 2022 was to sell Rally.
This rally might be different
But 2023 will be a very different year than 2022. 2022 was marked by 1) major inflation surprises in key global markets such as the US and Europe and 2) subsequent aggressive rate hikes by the US Federal Reserve and others. European Central Bank. Recent changes in economic data, especially in the United States, suggest that 2023 is far more likely to be the year of an unexpected drop in inflation and easing expectations of his Fed tightening.
As a result, this latest Bitcoin rally feels different. One closely tracked options market indicator shows investors have become the most optimistic about his six-month performance outlook for Bitcoin since early 2022.
Bitcoin’s 180-day call put skew bounced back into positive territory on Monday for the first time in a year, according to crypto derivatives data analytics firm Amberdata. , is more costly than a bearish put option of the same maturity.
“We see the current rally in digital assets as a market reversal, not a bear market rally,” 3iQ head of research Mark Connors said in a recent email to clients. Connors noted that recent non-hawkish comments by Fed policymakers suggest that the sharp decline in the money supply in 2022 may be coming to an end.
These Indicators Suggest Crypto Winter Turns to Spring
Other widely followed technical indicators also support the idea that the crypto winter is finally over. First, Bitcoin has returned convincingly north of its 200-day moving average for the first time since December 2021.
Just as April 2021’s failed attempt to recover above 200 DMA marks a key turning point for the market (Bitcoin is set to fall another 67% in 2022), Bitcoin bulls are 1 We hope the month’s bullish 200DMA break marks the beginning of the market. new bull market.
According to Glassnode, “The 200-day SMA is so widely observed by market analysts that if it is broken convincingly, it tends to have a significant impact on investor sentiment… It is often seen as the macro bullish/bearish minimum threshold level.”
Meanwhile, Bitcoin’s latest rally has returned north of the realized price for the first time since early November, when it last lasted around $19,700 according to Glassnode. , which means “low degree of severe economic stress”.
Bitcoin is back north of both the 200DMA and realized price for the first time since December 2021, according to Glassnode data.