The cryptocurrency market continues to show signs of improvement. Bitcoin, the number one cryptocurrency, has continued its price upswing as its breaks above its 200-day moving average. In addition, the market generally has recovered, as crypto enthusiasts believe the crypto winter is close to its end.
The U.S. Consumer Price Index (CPI) report has given Bitcoin and other cryptocurrency leverage. The consumer price index is an important metric that measures the monthly changes in prices paid by United State consumers. The CPI values also measure economic inflation and deflation using statistics from customer expenditures.
Events over time have shown that macroeconomic factors such as inflation and deflation affect Bitcoin and other cryptocurrencies. So when the CPI is high, it means that inflation is also high leading to a spike in interest rates that plummet crypto prices.
Whales Pushing Bitcoin Rally
On Saturday, January 14, Bitcoin’s price surpassed the $21,000 level on the back of declining inflation figures. BTC gained 7.5% on that day and peaked at $21,299. Santiment, an analytic platform, states that the number of Bitcoin addresses holding between 100-1000 BTC is increasing rapidly, probably pushing BTC.
Santiment also revealed that more than 416 addresses hold 100-1000 BTC. It is an increase of 3.04% in eight weeks. The whales’ influence in the market is critical as they control prices due to the size of their portfolios. In addition, the price increases caused by the whales have a wider-reaching effect on other cryptocurrencies in the market.
Bitcoin Price Prediction, A Possible Bull Run?
Glassnode data shows that Bitcoin is currently correlating with its previous market cycles. For example, after the 2018-2019 bear market, BTC traded under its 200-day Moving Average (DMA) for 386 days. Similarly, the BTC price traded under its 200 DMA in this bear market for 381 days till it broke above it.
Since the turn of the year, BTC has recorded gains for twelve consecutive days. Santiment reports that it recorded these gains over the last eight weeks. Bitcoin short-term traders recorded their most profitable spending day on January 14 since April 2022. According to Glassnode, the BTC trading volume has increased in the past months.
At the time of writing, BTC trades at 20,788. The support levels are $20,207, $20,392, and $20,624. Also, the resistance levels are $21,042, $21,227, and $21,459. It is currently trading above its 50-day SMA, which indicates that the price will remain bullish in the short term. Also, BTC is trading above its 200-day SMA, which shows a long-term price increase.
The candle stick patterns on the chart are ascending, showing that the bulls are in control of the market. The Relative Strength Index (RSI) reading is firmly in the overbought zone reading, 86.53. Since the BTC whales are active, the RSI indicates a significant rise in buying pressure.
The Moving Average Convergence/ Divergence (MACD) is above its signal line and showing divergence. It also indicates that BTC is worth buying since it will continue its ascent. BTC’s long-term and short-term outlooks are optimistic as the crypto market rallies.
The price of BTC will likely continue to increase for the coming weeks. Expect other cryptocurrencies to follow suit, except there are negative external forces, such as inflation.
But it is important to note that cryptocurrencies are volatile. If BTC losses its price momentum, it will need to rally to return to the former price. Cryptocurrencies remain volatile and can differ from past behavior at any time.