Bitcoin (BTC) hit fresh five-month highs on Sunday following a strong rally that saw the benchmark cryptocurrency flirt with US$24,000 for the first time since August 2022.
BTC/USDT hit a resistance wall though, and has since scaled back to US$23,500, still an unexpectedly strong position in any regard. The question is, can bitcoin assert itself and maintain this price point?
Bitcoin (BTC) has had one of the strongest January performance in years – Source: currency.com
A lot is riding on the Federal Reserve’s interest rate announcement scheduled for Wednesday (and the European Central Bank and Bank of England’s announcements the day after, for that matter).
A dovish 25 basis point (bps) US rate hike seems more than likely, but investors will be keen to hear what the committee has in store for the rest of the year. Any indication of an outright pause in rate rises, as was announced in Canada last week, could see a migration of cash flows into equities and other risk assets, which bitcoin (BTC) would naturally benefit from.
Meanwhile, the Crypto Fear & Greed Index is at its strongest position since March 2022, underscoring the surprisingly high market sentiment for bitcoin so far this year.
Ethereum hit a high of US$1,660 against the US dollar overnight before heading back below US$1,600.
While the second-largest crypto has recovered strongly in 2023, it has underperformed against bitcoin, as has the majority of the altcoin space, barring a few exceptions.
Avalanche (AVAX), despite having a few bearish trading sessions lately, has gained over 30% on bitcoin in the year to date, while Polygon (MATIC) has gained a respectable 5%.
Mina Protocol (MINA) has been a top riser this week, with the self-described “succinct blockchain” adding nearly 50% to its now US$700mln market capitalisation.
Global cryptocurrency market cap currently stands at US$1.05tn, while total value locked across all decentralised finance (DeFi) protocols is US$48.4bn.