The leading cryptocurrency Bitcoin, is trading sideways, with the price remaining within a limited range of $22,500 to $23,350. On Jan. 23, BTC/USD closed at $23,114 after hitting a high of $23,114.
Bitcoin hits all-time highs, surpassing the $23K mark
BTC, the world’s largest cryptocurrency by market capitalization, hit $23,000 for the first time since mid-August 2022 on Saturday. This level was broken again on Monday, indicating a possible uptrend ahead.
This upward trend also pushed the total cryptocurrency market capitalization above $1 billion for the first time in 5 months. There were numerous reasons for the bullish momentum in Bitcoin prices that took them above the $23K mark. Let’s examine them now.
Positive CPI data
The CPI report released on January 12 showed a 0.1% decline in headline inflation, the biggest drop since April 2020. The market turned more optimistic as inflation kept falling for six months in a row.
In addition, bets have increased that the Federal Reserve will back down in the face of an aggressive rise in interest rates. As a result, BTC prices rose, raising the prospect of a broad recovery in the crypto market.
Exploring US Dollar Index Weakness
Bitcoin prices also benefited from the weakening US dollar index. Historically, every time the DXY falls, sentiment in risky assets rises. As a result of the weakness of the US dollar index, Bitcoin is the riskiest asset gain.
Given rising expectations for slower Fed rate hikes, the DXY came under pressure at the start of the week, testing a fresh 9-month low.
Bitcoin and Stocks Correlation
The correlation coefficient between Bitcoin and the major stock indices has recently been very high. The S&P500, Dow Jones, and NASDAQ are the main indices that provide an overview of the economy. It is not uncommon for interest rates to drop, causing the economy to grow and stocks to rise as a result.
As a result of their high correlation coefficient, better performance from these indices will provide a bigger boost to Bitcoin prices. Bullish stock markets are also driving Bitcoin prices these days.
On Monday, the Dow Jones Industrial Average (DJI) gained 1.1%, the NASDAQ gained 2.4% and the S&P 500 (SPX) gained 1.5%.
While the BTC price indicates bullish prospects in the near term, amid renewed hopes for interest rate cuts, there are still numerous challenges to consider. The increased risk of centralized exchange insolvency, as well as Binance reserve concerns.
Furthermore, the bankruptcy of Genesis and impending crypto legislation are some of the factors preventing BTC prices from rising further. Furthermore, all of these factors have led some analysts to believe that BTC could drop as low as $15,000 in the near future.
Bitcoin it is currently worth $22,800 and has a 24-hour trading volume of $28 billion. In the last 24 hours, Bitcoin is up almost 1%. CoinMarketCap currently ranks first with a live market capitalization of $435 billion.
On a daily basis, Bitcoin finds strong resistance near a double top pattern at $22,830. If the candlesticks close below this level, a correction to the downside is likely to begin and continue until the $21,500 level is reached.
The RSI and MACD indicators are overbought, indicating the possibility of a bearish correction in BTC. If the price of Bitcoin falls below $21,500, it can drop as low as $20,450.
On the upside, Bitcoin’s immediate resistance is at $22,850, and a break above this level could expose BTC to levels as high as $23,900 and $25,150.
If you’re looking for other high-potential crypto projects alongside BTC, we’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by the CryptoNews Industry conversation team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section presents information from crypto industry players and is not part of the editorial content of Cryptonews.com.
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