Bitcoin (BTC) is having its best start to the year since 2013. The price of the largest cryptocurrency by market cap has risen 40 percent this month amid weakness in the US dollar. Observers say the rally was heavily supported by buyers in America. Meanwhile, a popular analyst predicts another 50 percent rise in BTC. Here are the details…
Bitcoin surged 40 percent in January
Markus Thielen, Head of Research and Strategy at Matrixport, said, “Bitcoin is up 40 percent year-to-date, with 35 percent of those returns occurring during US trading hours. “This is an 85 percent contribution of the rally associated with US-based investors.” “We interpret this as a clear signal that US institutions are now buyers of bitcoin,” Thielen added. Bitcoin had also increased by 51 percent in January 2013.
Unlike stocks, Bitcoin – and cryptocurrencies in general – trades around the clock, allowing watchers to track order flows across different time zones and understand the source of buying or selling pressure. Institutions’ bullish position is also evident from the renewed premium on Bitcoin futures listed on the Chicago Mercantile Exchange. Thielen used the following statements:
Institutions aren’t just buying Bitcoin spot, instead we’re seeing consistently high premiums for perpetual futures. We interpret this as an indication that faster institutional traders and hedge funds are actively buying from the recent bottom in the crypto markets.
Deutsche Digital Assets made a similar observation earlier this month, noting the rise in Coinbase premium as evidence of the growing buying interest from sophisticated US-based investors over retail investors. “Traditional and crypto-focused hedge funds are buying into companies and traditional asset managers,” David Guong, head of research at Coinbase Institutional, said in his weekly market commentary published Jan.
Analyst: 50 percent rise is possible
Meanwhile, economist and crypto trader Alex Kruger has voiced the bullish trend towards Bitcoin (BTC), saying that king crypto could stage a massive rally in 2023. Kruger told his 150,800 Twitter followers that the largest crypto-asset by market cap could soar to $35,000, a roughly 52 percent jump from current levels before a correction is made. According to Kruger, such a rally of Bitcoin would be in line with the normal functioning of the markets.
cryptocoin.com According to data, Bitcoin is trading at $22,977 at the time of writing. When asked if Bitcoin could drop to between $19,000 and $20,000 this year after its rise, Kruger says it’s likely, but notes that $23,000 is more likely. The economist also says that weak earnings projections from publicly traded companies are unlikely to trigger a price drop for Bitcoin, as stocks and crypto assets currently have a weak correlation.
However, Kruger says that the Federal Open Market Committee (FOMC)’s continued support for rate hikes and other monetary policy tightening measures will likely affect the crypto markets, adding that what happens next is still on the agenda.
