Bitcoin (BTC) started 2023 with a bang, hitting several key support levels that investors are hoping to build a base for the virgin cryptocurrency to run higher. The bullish momentum came as investors took advantage of the positive macroeconomic news to inject more capital into the asset.
In this line, Bitcoin has seen an inflow of more than $73 billion within seven days under constant buying pressure. At press time on January 15, Bitcoin commanded a market capitalization of $399.1 billion, which is an increase of about 22% from the $326.1 billion recorded on January 8.
In fact, the value of bitcoin is benefiting from increased capital inflows, as the asset is trading at $20,886, having gained more than 22% in seven days. On the weekly chart, BTC peaked above $21,000 on January 14th. Notably, Bitcoin’s momentum has translated into one of the asset’s extended gains in nearly two years.
The CPI data leads to an influx of Bitcoin capital
The steady influx of Bitcoin capital highlights the rally in the cryptocurrency markets following the latest US Consumer Price Index (CPI) for December, which came in at 6.5% year-on-year.
The reports were interpreted as a sign that the Federal Reserve is winning the battle to rein in inflation. This factor translates to the possibility that risky assets such as Bitcoin will not be exposed to the additional effects of severe monetary tightening pressure.
With Bitcoin seeing bullish momentum recently and reversing the general effects of the FTX crash, investors are still wondering where the asset’s price might go next. In fact, the main concern is whether or not the bear market is over.
Can Bitcoin Hold Its Recent Gains?
Investors still need to be cautious, as Bitcoin is still facing bearish sentiment that may reverse current gains. For example, cryptocurrency entities have yet to recover from the effects of the macroeconomic environment, announcing a series of layoffs along with the possibility of the US forming a House subcommittee on cryptocurrency.
Additionally, based on the general market sentiment you follow Index of fear and greedThe crypto sector seems to be heading towards optimism. The indicator is in line with ‘neutral’ sentiment barely a day after weakening in the ‘fear’ territory.
Meanwhile, cryptocurrency trading expert and analyst Michael Van de Poppe noted that Bitcoin is still facing important events that are likely to influence the current rally. In a YouTube video posted Jan. 13, he said investors should keep an eye on data that affects overall economic health, such as retail sales.
He further warned that although inflation numbers are slowing, the Fed could still raise interest rates if overall economic health is low, an element that could affect purchasing power.
Warning: The content of this website should not be considered as investment advice. Speculative investments. When you invest, your capital is at risk.
More than $70 billion has been injected into Bitcoin this week; More purchasing power in the future? It first appeared on Coinphony.