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Bitcoin is wrapping up its best month in over a year. It has already recovered more than half of its losses in 2022 and some say it has bottomed out this crypto winter. Bitcoin rose 38.39% as of Tuesday, according to Coin Metrics, making it the best month since October 2021 and the best January of the decade. Ether, which led the pre-merger cryptocurrency recovery last summer, has surged 31% this month, emerging from a 67.06% decline in 2022. Bitcoin is catching up for the most part after falling 63.96% at the end of 2022. At the same time, investor sentiment has been boosted by optimism around falling inflation and the possibility that the Federal Reserve will soon slow its inflation-fighting rate hikes. “Bad news and subsequent headlines [at the end of last year] Curry Cox, a U.S. investment analyst at investment firm eToro, said bitcoin has become very sensitive to good news and will likely keep interest rates high until inflation subsides. It could take time and it remains to be seen if a recession will materialize.If it does, Bitcoin could come under pressure as investment declines and unemployment rises..a week The bad news continued throughout January, led by cryptocurrency lender Genesis, which filed for bankruptcy earlier, and its parent company, Digital Currency Group. Bitcoin’s dominance, which shows how much of the cryptocurrency market capitalization is made up of bitcoin, has risen by as much as 10% since its inception, Citi analyst Joseph Ayoub said in a recent report. “This marks the first significant increase since May 2022, or during Luna’s decline,” the memo said. ks he is reminiscent of April 2019, during which he saw BTC rise hit the bottom of the cryptocurrency market, very similar to his recent rise in BTC dominance. According to Greg Magadini, Director of Derivatives at Amberdata, the upside shock as a downside shock is a big departure from 2022. As far as bottom prices are concerned, the big picture remains a big challenge, he added. “BTC has shown a lot of correlation with traditional risk assets in 2022 and the trend is unlikely to end,” he said. “This means the Fed’s path forward is still very important.” The Fed said on Tuesday he will start his two-day policy meeting, and investors will see the latest policy update on Wednesday. intend to do something. Lyn Alden, founder of Lyn Alden Investment Strategy, looks not just at the Fed, but at the Treasury. Liquidity conditions improved in the fourth quarter due to the Treasury Department’s general account cutbacks, adding liquidity to the system and offsetting the Fed’s quantitative tightening. “Probably by early summer, once the debt ceiling is resolved, the Treasury will need to start replenishing Treasury cash accounts, sucking liquidity out of the system,” she said. It could very well have hit , but the market isn’t out of the woods yet until we see a resolution to the Treasury Department’s general account cash withdrawals.” We think it’s a very attractive long-term accumulation zone, but there’s still a lot of risk in the 3-12 month view,” Alden added. eToro’s Cox has focused on the technicals because the uncertainty is so high, he said Bitcoin had broken above its 200-day moving average in January and above its past 200-day average closing price. Hitting the mark is taken into account and indicates that the asset is trending upward. Cox is more optimistic. “If Bitcoin can hold that line, it could go above $20,000 for some time. From there, we move on to speculation about the health of the economy and the Fed’s interest rate plans, and in the near future, Bitcoin will likely hit other risky assets. We expect to follow suit,” she said.
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