23.01.2023 – BTC is back among the winners: bitcoin has just returned to the prices of the previous September. The largest e-device has had an amazing run for about two weeks. There are hardly any really solid reasons for this in the news. Nevertheless, there is a smorgasbord of bullish factors.
The mini-rally, which we reported on here a few days ago, continued recently. BTCUSD has already gained about a third this year. Here is the daily chart.
Source: Bernstein Bank GmbH
With that, let’s take a closer look at the background. We have found some valid conjectures at “FXStreet”. According to them, the Ukraine war is heating up demand for cyber currencies; Big Russian Money is likely to bring a lot of money to safety from US sanctions. In addition, the U.S. Securities and Exchange Commission (SEC) is apparently on the verge of approving the first index fund based on BTC futures – that would be a real vote of confidence. In the U.S. Senate, there were also signs of crypto regulation that would not hurt the industry.
More hunger for risk
The “Cointelegraph” also referred to a correlation that can be observed again and again: as soon as the U.S. dollar index dips, BTC rises. Furthermore, there is a correlation to more risk appetite in equities, which is fed by the recently cooled inflation – which is why the Federal Reserve may now not raise interest rates so sharply after all. In any case, the market has digested the bankruptcy of crypto lender Genesis well. Genesis took about $226 million in losses from the collapse of FTX. From a technical perspective, the website pointed to the Relative Strength Index, which behaved the same way it did in the recovery after the 2018 bear market.
Trades on the dark web
We add: Cyber Crime is also a huge bullish factor, but one that is going on undetected in the background. If, for example, North Korea is exchanging loot in bitcoin, of course we won’t read about it in any news service. Nor will we always hear about it when companies pay ransoms in BTC after being knocked out by ransomware. In any case, the topic is burning on the minds of discrete corporations: According to the Allianz Risk Barometer 2023, cybercrime and business interruption are the top two threats to companies worldwide.
Beware of profit-taking
Last but not least, it should be noted that despite the recent bull market, the trees are not growing to the sky: Joe DiPasquale, head of BitBull Capital, explained to “CoinDesk” that the rise was typical for the first quarter and stated “a long consolidation period that saw shorts accumulating. (…) The market has risen, partially fueled the short squeeze.” And then he warned, “Bitcoin and several altcoins are overheated and due for a correction. (…) We would not be surprised to see Bitcoin test the $20,000 level in the coming days.” Bernstein Bank wishes successful trades and investments!
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