Bitcoin is trading around the highest levels since last summer after a big rally to start 2023.
Rutmer Visser/Dreamstime
Bitcoin
and other cryptocurrencies moved higher Wednesday. After a roaring rally to start the year, cryptos are now mostly range-bound but key catalysts lie ahead and there is at least one sign that traders have more conviction than ever.
The price of Bitcoin has gained 1% over the past 24 hours to near $23,200, a price level around which it has been changing hands for much of the past few weeks. The largest digital asset has gained some 40% since the start of the year, marching back from near two-year lows notched after the collapse of crypto exchange FTX in November to trade around the highest levels since last summer.
“Bitcoin managed to recover from the lower bound of the current two-week-long range, but it is still struggling to pick a direction,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank. “The next big event will likely be next week’s CPI announcement, but multiple speeches by Fed members remain this week and the market should also remain cautious.”
Indeed, macroeconomic catalysts are likely to be the most critical factor for crypto prices. The rally in digital assets this year has happened in tandem with similar action in the stock market, with improving risk appetite among investors driving the
Dow Jones Industrial Average
and
S&P 500
upward alongside Bitcoin.
With catalysts for Bitcoin ahead, and the crypto market largely on pause after big gains to start the year, investors will be looking for reasons to keep the rally going. A bullish sign is that the conviction of crypto holders—or HODLers, who Hold On for Dear Life—appears to be at record levels.
“Reserve Risk for Bitcoin recently fell to its lowest level ever (lower than the 2019 or 2020 low), this indicates that the HODLer conviction is close to record highs,” analysts at crypto exchange Bitfinex wrote in a report this week.
Beyond Bitcoin,
Ether
—the second-largest crypto—rose 2% to $1,675. Smaller cryptos or altcoins were also upbeat, with
Cardano
climbing 2% and
Polygon
advancing 3%. Memecoins were more muted, with
Dogecoin
and
Shiba Inu
both up less than 1%.
Write to Jack Denton at jack.denton@barrons.com
Credit: marketwatch.com