Dear Teroxx Community,
This week we witnessed a market of digital assets, which experienced some kind of consolidation.
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
In just a few days, Bitcoin could put the finishing touches on its strongest January since 2013, but experts are still urging caution in the medium term. As Cointelegraph Markets Pro and TradingView data show accordingly, the bitcoin price reached a temporary high of $24,498 in the night from Saturday to Sunday as a result.
Although the jump was short-lived, this is already the third attempt to tap liquidity above the $23,400 mark in recent days. Crypto analysts at Material Indicators use Binance’s bitcoin order book to show that it will definitely take more firepower to neutralize the bears.
As of January 29, the next major resistances are located at $24,500 and $25,000, nonetheless traders are already hoping for an advance to the latter.
In addition to the end of the month at the beginning of the week, however, several important directional decisions at the macroeconomic level are still ahead in the coming days, so several central banks will announce their further monetary and interest rate policy for the next month. These indications could in turn have an impact on the bitcoin price.
Nevertheless, there is disagreement among crypto analysts about the further development in the new year, with Alden clearly belonging to the rather cautious voices. Accordingly, the expert states that it would be naïve to dream of an unimpeded advance to new record highs now based on the current strength.
She reasons that the U.S. government and the U.S. Federal Reserve will continue to indirectly influence the price trend of BTC with their joint monetary policy.
“I expect the bottoming of Bitcoin to be a longer process,” as Alden first states. She continues:
“The bitcoin price is closely tied to the money supply, and there has been more liquidity since Q4 2022.” The extra money in circulation has actually boosted the bitcoin price in recent weeks, already making up for all the losses since the spectacular collapse of the FTX crypto exchange. Currently, BTC is even at its highest level since mid-August.
“The collapse of FTX dragged the crypto industry down in the second half of the fourth quarter, while many other investment products gained during that period (stocks, gold, etc.). Now Bitcoin is catching up and climbing to the value we probably would have gotten before without the FTX collapse,” Alden said.
Analyzing the macro situation, crypto market participants’ opinions are also divided. The U.S. Federal Reserve will decide on the next interest rate hike on February 1. As a result, many expect inflation to fall, but there are different interpretations.
The World Economic Forum has also failed to dampen sentiment in 2023, although some voices have been critical of crypto.
Dan Tapiero, the founder and CEO of 10T Holdings, believes the question is how bullish risk assets will react to the U.S. Federal Reserve’s change in policy if it eases it.
“How will the FED react when inflation drops to 0? It’s coming a good long year for BTC, ETH and gold,” as he explained on Twitter.
“USD bear market and 10-year bonds need to fall to below 3 percent to keep the trends going. Digital asset ecosystem will flourish as rates reached without government intervention. The free market is working!”
Technical term of the week
Liquidity level: Describes price levels at which increased capital affects or will affect the market. Often support or resistance levels can be analyzed through this. The different liquidity levels can be tracked via the order book.
Digital Asset Markt
Bullish outlook: A positive outlook by the FED could push Bitcoin towards $25,000.
Bearish outlook: A rather negative interest rate decision could lead to the first major sell-offs of the year.