Despite the fact that many analysts warn that this could turn around quickly, the renewed positive sentiment continues for the time being. The entire crypto market turns green again and the recent rally forth. Bitcoin (BTC) held around $17,400 yesterday and started to rise sharply again towards evening.
Shortly after midnight, bitcoin made a big jump and even broke through $ 18,000. The price then spiked around $18,300 and touched nearly $18,400 on some exchanges. During the night the price dropped slightly again and is currently looking for support and a higher low. The BTC price stands at $18,110 on Binance and $16,840 on Bitvavo at the time of writing.
This means that the bitcoin price is up 4% today. Trading volume increased by 48% in the last 24 hours. The total market capitalization is $349 billion and the dominance is 39.5%. The Fear & Greed Index comes out at 30 (Fear).
Bitcoin Fear and Greed Index is 30 – Fear
Current price: $17,931 pic.twitter.com/gTh87d9G6a— Bitcoin Fear and Greed Index (@BitcoinFear) January 12, 2023
Bitcoin short squeeze and hash rate at all-time high
Bitcoin’s rise last night was accompanied by a significant short squeeze. $52 million in short positions were liquidated in about two hours, reports On-Chain College. It is a sign that many investors still very much bearish are.
About $52 million in #Bitcoin Short Liquidations over a 2 hour period pic.twitter.com/ZgC0Tuj8KJ
— On-Chain College (@OnChainCollege) January 12, 2023
In addition, Dylan LeClair notices that the bitcoin hash ratethe total computing power of the network, back around all time high sit. However, that in turn increases the pressure on miners and this pressure is already very high due to the low price and high costs. LeClair adds that miners’ bitcoin reserves are now almost exhausted.
Hash rate moving averages for a different perspective.
Miners look to be running out of inventory to dump. pic.twitter.com/FA7Srkiuuk
— Dylan LeClair 🟠 (@DylanLeClair_) January 11, 2023
What will CPI do with the BTC price today?
#Bitcoin pumped into the key support/resistance range, perfectly in time for tomorrow morning’s CPI data… pic.twitter.com/KRlcoF4939
— Caleb Franzen (@CalebFranzen) January 12, 2023
This relief, or bear market, rally has also been seen in other financial markets since the turn of the year. There is speculation that fears about Federal Reserve policy have eased somewhat. The fear returned sharply in December when the Fed did more hawkish sounded better than expected.
CPI number will be released on Thursday, Jan 12. In 2022, the S&P 500 traded down on 7/12 CPI release days but 4 out of the last 5 releases were up days (with strong moves). What will Thursday bring? pic.twitter.com/pqN38K45jb
— Barchart (@Barchart) January 10, 2023
Therefore, the US consumer price index (CPI), which will be released later today, could again have a major impact on prices. If inflation figures come in higher than expected, there is a good chance that the Fed will tighten its strings anyway and fear will kick in again. If the numbers turn out lower than expected, this may further ease the pressure and we will see this rally continue a bit further. The inflation figures will be published at 14:30 Dutch time.
2/ This event is important given that it is the final CPI before the February FOMC
This will help the market price the Feb. FOMC decision – currently the market sees a 25bps hike as most likely
Upside miss in CPI increases odds of 50bps, downside miss increases odds of 25bps ℹ️ pic.twitter.com/OTlU2m8FuL
— tedtalksmacro (@tedtalksmacro) January 12, 2023
Many analysts remain bearish on bitcoin price
Despite the recent rally, many analysts warn that we are still in a bear market. The analysts of Crypto Insiders also see two different scenarios where bitcoin may take another significant dive in the medium term. Il Capo of Crypto is sticking to its bearish prediction that bitcoin could soon drop to $12,000.
Good morning.
No changes. pic.twitter.com/EMJiVZtBJh
— il Capo Of Crypto (@CryptoCapo_) January 12, 2023
Analyst Ali Martinez reports that bitcoin found support around the Proof of Work pricing model during the previous two bear markets. This is currently around $12,500.
#Bitcoin | Notice that in the last two bearish cycles $BTC found stable support around the PoW Pricing Model. Even during the March 2020 crash, #BTC nearly tested this price level.
The PoW Pricing Model currently hovers around $12,530. pic.twitter.com/9ndXvQ0zys
— Ali (@ali_charts) January 11, 2023
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