• Bitcoin (BTC) rallied 11% between Jan. 20 and Jan. 21, reaching the $23,000 level and shattering bears‘ expectations for a pullback to $20,000.
• Demand from Asia-based retail investors drove the move, according to data from a key stablecoin premium indicator.
• The tech-heavy Nasdaq 100 index also gained 5.1% between Jan. 20 and Jan. 23, fueled by investors‘ hope in China reopening for business after its COVID-19 lockdowns and weaker-than-expected economic data in the U.S. and the Eurozone.
Bitcoin (BTC) has been on a bullish rally this week, with its price rising 11% from $20,000 to $23,000 between Jan. 20 and Jan. 21. This move has shattered bears‘ expectations of a pullback to $20,000, and is further evidence of a healthy appetite from bulls.
The move has been driven by demand from Asia-based retail investors, according to data from a key stablecoin premium indicator. This is a positive sign for the cryptocurrency and could signal a potential Bitcoin rally to $25,000.
The tech-heavy Nasdaq 100 index has also seen some positive gains this week, gaining 5.1% between Jan. 20 and Jan. 23. This can be attributed to investors‘ hope in China reopening for business after its COVID-19 lockdowns and weaker-than-expected economic data in the U.S. and the Eurozone.
Additionally, U.S. Federal Reserve Governor Christopher Waller reinforced the market expectation of a 25 basis point interest rate increase in February. This means that the central bank is aiming for a „soft landing,“ or a controlled decline of the economy, with fewer job openings and less inflation.
However, if companies struggle with their balance sheets due to the increased cost of capital, earnings tend to nosedive and ultimately layoffs will be much higher than anticipated. This could put a damper on the bullish sentiment surrounding Bitcoin and other cryptocurrencies.
On Jan. 23, on-chain analytics firm Glassnode pointed out that long-term Bitcoin investors held losing positions for over a year, so those are likely more resilient to further drops in the cryptocurrency’s price. This suggests that there is still a healthy appetite from bulls, despite the current uncertainties in the market.
Overall, the rally in Bitcoin’s price, coupled with the positive gains in the Nasdaq 100 index, suggest that investors are optimistic about the cryptocurrency’s future. With a handful of heavyweight companies set to report their latest quarterly earnings this week, the market could be in for some further volatility.