2023 has been a successful year for the cryptocurrency market. By more than a decade of January, the review has risen in price against the dollar by 40%, to $23,335. The whole week the price was trading in the price range of $20,600 - $21,650, and only by the close of business weeks the buyers broke through to $22,000.
Growth volatility has risen in the last three trading days per session. January 18 BTC/USDt Lost to $20407. Bitcoin has fallen in price following a sharp drop in the S&P500 and Nasdaq indices. The head of the Federal Reserve Bank of St. Louis James Bullard on the review of the US Federal Reserve System. He said the Fed's policy should remain tighter in 2023.
Buyers managed to sell users $20300-20400. On January 19, the observation rate recovered to $21,192. Demand for cryptocurrency has increased against the background of the announcement of the new head of FTX, John Ray, about the possibility of reviving the exchange. The news about the restart of the exchange caused the native FTT token to rally by 37%, to 2.48%. It was speculative activity for quick profits on the pampas, with watch strengthening being subdued.
On Friday, January 20, according to the results of the observation day, it moved by 7.57%, to $22,667. Prior to the session, the price was trading at $21,000. By the close of trading in the US, the BTC/USDt pair jumped sharply to $22,385. On Saturday, January 21, buyers moved the maximum to $23,371
There are several factors that explain the increase in buyer activity and the price acceleration:
- The fall of the dollar index to 101.74 points;
- A sharp recovery in the S & P500 index by 1.88%, to 3972.06 points;
- US Federal Reserve Governor Christopher Waller, a proponent of aggressive rate hikes last year, advocated cutting the pace of rate hikes to 25bp. at the February 1 meeting.
- US Treasury Secretary Janet Yellen said Congress' failure to raise the borrowing ceiling would lead to a global financial crisis and default.
US Treasury Secretary Janet Yellen said that the refusal of Congress to increase the borrowing ceiling (and it has already exceeded $ 31 trillion) will lead to a default on bonds, to delinquencies in social security payments. And plunging the US economy into recession could trigger a global financial crisis. According to her, this will undermine the role of the dollar as a reserve currency, which is used in transactions around the world.
For the United States, a long debate on the ceiling of the national debt is a common thing, but this year the media can shake this topic with renewed vigor. Janet Yellen, scaring Congress, simply reminded investors of the precarious position of the dollar and US bonds. Cryptocurrency against this background can act as a protective asset against an even greater collapse of the dollar.
If investors point to the cue ball and say that it is possible to wait out the impending “STORM” (uncertainty with the US government debt), then it can quickly recover to $35,000. Technical factors and the thin market, which lost liquidity after collapse of FTX.
The government repeatedly suspended work when it could not agree. It is not known when Democrats and Republicans will reach a decision on the national debt ceiling. Let me remind you that under Clinton, state employees were sent on vacation for 21 days, under Obama - for 16 days, under Trump - for 20 days.
The BTC/USDt pair broke above the $22,500 resistance level, rising to $23,371. Since the beginning of the year, it has risen in price by 40%. According to Coinglass, $132 million in short positions were liquidated on the rise. Buyers rewrote the two tops of $21,480 on November 5, 2022 and $22,799 on September 13, 2022 - a strong technical signal to strengthen the position of buyers. Now they need to consolidate above $22,500 in order for the crypto winter to end and the recovery phase to continue. New targets lit up on the horizon: 25k ($25211 - top of August 15, 2022) and 30k (round value, psychological resistance level).
On Saturday, January 21, the BTC/USDt pair rose 0.51% to $22,783 with a high of $23,371. At the time of writing the review, they give $22,860 per cue ball. Buyers decided to take a break until the opening of stock markets on Monday.
Breakdown of the important $22,500 level is a positive factor for the crypto market. Now we need to defend the $22,100 level in order to consolidate the breakdown and prevent sellers from returning bearish sentiment to the market.
The focus is on the US Federal Reserve meeting and George Powell's press conference, which are scheduled for February 1. According to the CME FedWatch Tool, there is a 99.3% chance of a 25bp rate hike to 4.75% per annum. Buyers' success will depend on Powell's speech at a press conference a week later.
Of the important events for the week from January 23 to January 29: a report with data on US GDP for the 4th quarter. The indicator is expected to decrease to 2.6% from 3.2%. The report will be released on January 26 at 16:30 Moscow time.
Good luck trading in the new week. Let your portfolio yield line grow daily, like a cue ball since the beginning of the year.