- An easing macroeconomic environment is giving bitcoin a bullish sentiment.
- But some market analysts believe the worst is yet to come.
Leading cryptocurrency, bitcoin, was hard-hit last year, trading as low as $15k in November after the epic collapse of FTX. That has since changed, and the price has climbed to $23,010 at press time, representing a 35% gain per data from CoinMarketCap. The uptrend, also reflected in other digital assets, has driven the global market cap to over a trillion dollars.
However, crypto enthusiasts are questioning whether bitcoin could sustain the positive momentum, coming amid an easing inflation rate and increasing job numbers, or whether a trend reversal is imminent. The US Labor Department recently issued data showing that inflation was moderating, and consumer prices were up by 6.5% in December. The question mostly asked is whether bitcoin has bottomed in yet.
Sean Farrell, the head of the digital asset strategy at Fundstrat, shared his thoughts with Bloomberg, lauding the positive sentiment amid the troubles facing Genesis Capital’s parent company DCG. ‘‘This week’s follow-through in price action is certainly encouraging’’ and defying any forced liquidations from the beleaguered crypto firm DCG, ‘‘there is a high probability that the absolute bottom in for crypto prices.’’
Others Believe We Could See the Lowest BTC Price in 2023
Not so is the case among the other online crypto community members, who believe the worst is yet to come. Rekt Capital, a crypto trader with more than 300k followers on Twitter, said that BTC could bottom in 2023 based on the technical aspects. ‘‘This current BTC Weekly Candle is looking very similar to the April 2019 Weekly Candle that confirmed a new Bull Market.’’
Still, some market analysts think the price could have reached the overbought territory, and the rally may not be sustainable. According to Katie Stockton of Fairland Strategies, $21,500 is at a Fibonacci retracement level – horizontal lines showing levels price can reverse direction. ‘‘Deeply overbought short-term readings challenge positive momentum, so we could not chase the rally at these levels,’’ she noted.
Says Hayden Hughes, the chief executive officer of Alpha Impact, a social trading firm: ‘‘Declining CPI coupled with the announcement that the FTX liquidators have recovered $5 billion in liquid assets have given crypto markets plenty of factors to forget the macro picture.’’ He added that the ‘‘markets have plenty of positive momentum heading into the next FOMC meeting next month.