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Bitcoin, the leading cryptocurrency, is trading flat, with prices staying within a limited range of $22,500 to $23,350. On January 23, BTC/USD closed at $23,114 after hitting his $23,114 high.
Bitcoin hits historic high, surpasses $23,000
BTC, the world’s largest cryptocurrency by market capitalization, hit $23,000 on Saturday for the first time since mid-August 2022. This level was breached again on Monday, signaling a possible bullish trend ahead.
The upward trend has also pushed the cryptocurrency market capitalization above $1 billion for the first time in five months. There were many reasons for Bitcoin’s bullish momentum above $23,000. Let’s examine them.
positive CPI data
The CPI report released on 12th January showed that overall inflation fell by 0.1%. This is the largest rate of decline since April 2020. Markets became more optimistic as inflation continued to fall for the sixth month in a row.
Additionally, bets on the Federal Reserve stepping back from aggressive rate hikes have increased. As a result, the price of BTC has risen, increasing the chances of a recovery for the entire cryptocurrency market.
Exploring USD Index Weakness
Bitcoin’s price also benefited from the fall in the US dollar index. Historically, risky asset sentiment rises whenever the DXY falls. Bitcoin is a riskier asset gain as a result of the weakness in the US dollar index.
The DXY came under pressure as the week began, hitting a nine-month low amid growing hopes of a slowdown in the pace of Fed rate hikes.
Correlation Between Bitcoin and Stocks
The correlation coefficient between Bitcoin and major stock indices has been very high recently. The S&P500, Dow Jones, and NASDAQ are major indicators that give an overview of the economy. It’s not uncommon for interest rates to fall, for the economy to grow, and for stocks to rise as a result.
Due to their high correlation coefficients, better performance of these indices will push the price of Bitcoin more strongly. The bullish stock market has also pushed the price of Bitcoin higher recently.
On Monday, the Dow Jones Industrial Average (DJI) was up 1.1%, the NASDAQ was up 2.4% and the S&P 500 (SPX) was up 1.5%.
Despite the bullish outlook for the BTC price in the short term, there are still many challenges to consider amid renewed hopes of rate cuts. The main risks of bankruptcy of centralized exchanges and concerns about Binance’s reserves.
Additionally, the bankruptcy of Genesis and the looming crypto law are some of the factors preventing BTC price from rising further. I believe it has the potential.
bitcoin price
Bitcoin is currently worth $22,800 with a 24-hour trading volume of $28 billion. In the last 24 hours, Bitcoin has risen nearly 1%. CoinMarketCap is currently ranked #1 with a live market cap of $435 billion.
On a daily basis, Bitcoin faces stiff resistance around the double top pattern at $22,830. If the candlestick breaks below this level, a bearish correction could begin and continue until the $21,500 level is reached.
The RSI and MACD indicators are overbought and indicate a possible bearish correction for BTC. If the price of Bitcoin breaks below $21,500, it can drop to $20,450.
On the plus side, Bitcoin’s immediate resistance is at $22,850, and a breakout of this level could expose BTC to higher levels of $23,900 and $25,150.
Buy BTC now
Alternative to Bitcoin
If you are looking for other likely crypto projects alongside BTC, crypto news Industry talk team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talks section features insights from crypto industry insiders and is not part of the editorial content of Cryptonews.com.
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