Bitcoin evangelists can breathe.
They have to tell themselves that their wildest predictions will probably come true.
For several days, prices for the most popular cryptocurrency have been on the rise, breaking with a see-saw momentum seen since the bankruptcy of cryptocurrency exchange FTX on November 11.
Bitcoin (BTC) Prices Hovered Around $20,749.71 When Last Checked, Data Firm Says CoinGecko. They are up 22% in the past seven days. BTC prices on January 13 even exceeded the symbolic threshold of $21,000. They had not crossed that threshold since November 5.
BTC’s current good momentum has unsurprisingly been praised by billionaire Michael Saylor, one of the digital asset’s strongest supporters.
“#Bitcoin is the best strategy,” Saylor wrote on Twitter on January 14. MicroStrategy (MSTR) – Get a free reportSaylor’s software company, is one of the few large companies to have invested heavily in bitcoin.
The bulls are back
The optimism around bitcoin is due to the fact that investors are relieved by the recent data around inflation which suggests that the Federal Reserve will be less aggressive in its interest rate hikes.
This possible point of inflection would then have the consequence of avoiding a deep recession, particularly negative for risky assets such as cryptocurrencies. Investors therefore prefer to ignore the uncertainties related to the bankruptcy of FTX which still hang over the crypto sector.
“We are technically still in a bear market, but the signs are that the bulls are starting to take back control,” said Nigel Green, CEO and founder of Fintech deVere Group. “The relief rally began following the latest US inflation data which was released on Thursday. He revealed to us CPI slowed to 6.5% in December from 7.1% the previous month.
“As inflation in the world’s largest economy appears to be brought under control thanks to the Federal Reserve’s aggressive interest rate hikes, it is more likely that the central bank will begin to ease off the pace. drag on the economy by slowing down hikes.”
Inflation in the United States fell in December and slowed for a sixth consecutive month, data from the Bureau of Labor Statistics indicated on January 12, further strengthening the case for an easing of the Fed’s rate policy in the coming months.
The headline consumer price index for December is estimated to have risen 6.5% from a year ago, down from the 7.1% pace recorded in November and broadly in line with Street Consensus Forecast.
Still far from the records of 2021
So-called core inflation, which excludes volatile components such as food and energy prices, rose 0.3% on the month and 5.7% on the year, the report notes. , the annual and monthly readings corresponding to the predictions of Street.
These inflation data are likely to encourage investors to take a little more risk by betting on asset classes that are mainly the promises of the future. Bitcoin drags the entire cryptocurrency market in its wake. The latter has exceeded $1 trillion, but it is still far from the all-time high of $3 trillion reached in November 2021.
Dogecoin (DOGE) and Shiba Inu (SHIB) meme coin prices are up 17.4% and 20% respectively in the last seven days.
“The ‘crypto winter’ is thawing amid growing signs that inflation is starting to subside,” Green said. “Of course, the crypto market won’t go in a straight line – no market ever does – but we expect the bears to go into hibernation and the bulls to be ready to run.”
While optimism seems to have returned, cryptocurrency prices are still far from their highs set amid the late 2021 crypto craze.
BTC prices had then reached the threshold of $69,044.77, while those of ETH had risen to $4,878.26.