Hopes in the crypto space are high for a bullish 2023 as Bitcoin price surges in a spectacular rally to 33,667 AUD! Ever since its all-time high in November 2021, the flagship crypto has struggled to regain its footing, with both price and investor confidence continuing to drop in a year-long downward spiral. Will this recent resurgence be a rally to remember and, more to the point, an indicator of turning tides?
What’s driving the 40% surge?
Bitcoin has been on an absolute tear since the start of 2023, rallying past $33k for the first time in a while. The surging value of Bitcoin has coincided with growing optimism among institutional investors, who play a significant role in the 40% surge cryptocurrency has experienced.
“That’s an 85% contribution of the rally associated with US-based investors,” says Marcus Thielen, the Head of Research at the crypto investment and lending firm Matrixport. “Hence, we interpret this as a clear signal that US institutions are buyers of Bitcoin right now.”
The recent performance of Bitcoin has also sparked positivity among the general public, ushering in a new change in sentiment. This is reflected by changes to the Fear & Greed Index for BTC and other prominent cryptocurrencies: It’s now at 61 (greed), which stands in contrast to 25 a month ago — or extreme fear.
This is further accentuated by a Goldman Sachs analysis on January 24, in which they considered Bitcoin to be the best-performing asset this year.
Is the bull run for Bitcoin here to stay?
So, is the bullish action for Bitcoin here to stay?
If we were to refer to the on-chain analytics firm Glassnode, there is definitely some optimism to be had.
If traders match the bear market that followed between 2017 to 2018 and 2021 to the current market, it will take 1,001 days until Bitcoin reaches a new all-time high. A similar trend also formed in April 2019, when the bear market of that cycle ended, and a bullish transition took place. As such, Bitcoin may follow the same 2019 trend and continue rising upwards.
For the time being, Bitcoin has taken a slight break in its rally. The broader cryptocurrency market saw a dip of about 4.5% over the past 24 hours. Despite an overall net positive performance for the month, this hiccup is still something to consider. Could it be the beginning of a significant downturn or simply a minor breather before a larger rally occurs (if history repeats itself)?
Balancing optimism and caution
Even though the recent gains have been good for many in the industry, they're still relatively small compared to Bitcoin’s all-time high of $91,000. The community can only hope that the positive performance will continue. In light of last week's dip however, proceeding with due diligence and caution will be the way to go for now.
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