12.01.2023 – Bitcoin is showing new life. There are two reasons for this: One is buying ahead of the Consumer Price Index (CPI), just like the stock market. Second, there is positive news from the insolvent broker FTX for a change.
As you can see in the daily chart, BTC has just bounced above 18,000. Previously, a bottom had formed. Cointelegraph commented that the last time BTC experienced such a long sequence of gains was in July 2021 during the Corona pandemic. We will see if the run continues after today’s CPI. Perhaps the market will conclude that the Federal Reserve is putting the brakes on new rate hikes. Maybe there will be a sell the news or a disappointment.
But the most important news comes from FTX. According to the report, the company has secured about $4.6 billion in cash and e-currency. The money will be used to pay off its lenders. Further assets in the amount of 4 billion dollars are probably to be sold. Thus, new hope has entered the market that the crypto business can soon return to normal. In other words, even a crisis company has managed to find trustworthy backers in these times.
HODLers in power
Previously, BTC had barely moved. The resilience could be due to a very specific investor group: Hold on dear for Life. HODL is thus not a misspelling of HOLD. But rather a term of its own. Say: buy and hold for life, come what may. Which would speak for a pretty massive support.
BTC defies Coinbase
In fact, BTC had shown stability recently even despite a brusque word from Coinbase: Recently, the crypto exchange announced that it would lay off around 20 percent of its employees. There had already been a first wave of layoffs last June. CEO Brian Armstrong now warned: “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.” Note: If many people lose their jobs in a recession, they will have to attack the reserves and sell BTC, for example.
Our conclusion from all this: the recent price movement suggests that bullish traders have joined the HODLers. We are curious to see what happens next. Bernstein Bank wishes successful trades and investments!
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