Bitcoin (BTC) had risen a lot faster last week than many analysts had expected. The price is no less than 27% up since the turn of the year. On Saturday, bitcoin already touched $ 21,000, but the resistance was still too great.
Last night, bitcoin broke through and even touched $ 21,450. This morning, however, bitcoin is struggling to hold above USD 21,000. The price comes in at $20,765 on Binance and $19,220 on Bitvavo at the time of writing.
Bitcoin $BTC now up almost 22% over the past 5 days and just put in a weekly close above the 2017 high 👀 pic.twitter.com/OmhQRVpKgB
— Barchart (@Barchart) January 16, 2023
This means that the bitcoin price is up 1.5% today. Trading volume fell 15% in the last 24 hours. The total market capitalization is $400 billion and the dominance is 41%.
Bitcoin Fear and Greed Index Shortly Shoots to Neutral
The well-known bitcoin fear and greed index has been at or close to “extreme fear” since June 2022. The huge price increase caused the index to reach 52 (neutral) last weekend, the highest since April 5, 2022. Last night the index fell back to 45 (fear), but it is still a clear sign of the improved market sentiment.
Bitcoin Fear and Greed Index is 45. Neutral
Current price: $20,879 pic.twitter.com/lnj3pd73XL— Bitcoin Fear and Greed Index (@BitcoinFear) January 16, 2023
Bitcoin price above 200-day moving averages after short squeeze
The sharp price increase shortly before the weekend resulted in an enormous liquidation of short positions, or a short squeeze. It was the biggest in over 3 months, Coinalyze reports:
— Coinalyse (@coinalyzetool) January 14, 2023
With that, bitcoin finally broke the infamous 200-day simple moving average around $19,500 and then immediately broke the 200-day exponential moving average just below $21,000. As analyst Caleb Franzen points out, the zone in between can be important and serve as support. If this does not hold, the sentiment can quickly return to bearish capsize.
If we fall back below this range, bias shifts back to bearish.
If we stay above this range, bias can remain bullish.It’s that simple. https://t.co/te0pt3bjT6
— Caleb Franzen (@CalebFranzen) January 16, 2023
Mining difficulty rises to new record
Bitcoin mining difficulty, as expected, rose by a whopping 10.26% last night. This brings the difficulty to a new record of 37.59 T against an average hash rate of 269 exahashes per second according to BTC.com.
In recent months, bitcoin miners have been under heavy pressure due to the high competition, high costs and low price. Nevertheless, the capitulation among miners finally seemed to be over, but this significant increase naturally creates more pressure. According to CryptoQuant analyst Kripto Mevsimi, miners were already shifting their reserves in preparation:
Miners started to change position
“We started to see from MPI and Miner Reserves charts that they already started preparing themselves.”
by @KriptoMevsimi— CryptoQuant.com (@cryptoquant_com) January 16, 2023
However, analysis company Delphi Digital reported at the end of last week that miners would have to sell almost all of their reserves in 2022 in order to survive. Can this still lead to a new capitulation round?
Bitcoin Miners have been selling almost all of their #BTC to keep their firms afloat. pic.twitter.com/GtimhQI8ZU
— Delphi Digital (@Delphi_Digital) January 13, 2023
Bitcoin price increase is the result of accumulation
According to analytics firm Santiment, the recent surge is the result of investors accumulating hefty amounts of BTC over the past few months. Even the whales would have already bought, although relatively a lot less.
📈 A definitive explanation on why #crypto prices have bounced:
🦈10-100 $BTC wallet added 105,600 #Bitcoin in fits 10 weeks
🐋100-1,000 $BTC wallet added 67,000 #Bitcoin in fits 8 weeks
🐳1,000-10,000 $BTC wallet added 37,100 #Bitcoin in fits 10 dayshttps://t.co/sGLqJLxGVD pic.twitter.com/kpQimOXmeO— Santiment (@santimentfeed) January 14, 2023
However, cryptoquant analyst Mac_D reports that institutional investors are still very cautious. We haven’t seen any large over-the-counter (OTC) transactions recently. They may first wait for a better macroeconomic situation.
$BTC has risen to 21K, but institutional investors are just watching
“OTC trading will be brisk when they expect a full-fledged uptrend turn.”
by @MAC_D46035Link👇https://t.co/mYyxXwyVJc pic.twitter.com/vgOkUNhIWN
— CryptoQuant.com (@cryptoquant_com) January 16, 2023
Bitcoin funding rates are rising fast, watch out for long squeeze
Finally, the Dutch analyst Maartunn warns that the so-called funding rates, or funding rates for perpetual derivatives, have reached a 14-month high. This can be done for one long squeeze worry and with that one pullback of the bitcoin price.
$BTC: Funding Rates hits a 14-month high 😱🥵
“In the previous occasions where Funding Rates were as high as today, #Bitcoin had a pull back.”
by @JA_Maartun— CryptoQuant.com (@cryptoquant_com) January 15, 2023
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