The cryptocurrency market continues to show signs of improvement. Bitcoin, the number one cryptocurrency, has continued its price surge as it breaks above its 200-day moving average. In addition, the market has generally recovered as crypto enthusiasts believe the crypto winter is about to end.
The US consumer price index (CPI) report has leveraged Bitcoin and other cryptocurrency. The Consumer Price Index is an important metric that measures the monthly price changes paid by consumers in the United States. The CPI values also measure economic inflation and deflation using customer spending statistics.
Events over time have shown that macroeconomic factors such as inflation and deflation affect Bitcoin and other cryptocurrencies. So when the CPI is high, it means that inflation is also high, leading to a spike in interest rates that plummet crypto prices.
So with this one new datesis a Bitcoin rally now possible as other altcoins, such as Ethereum, recorded improved numbers.
Whales Push Bitcoin Rally
On Saturday, January 14, the price of Bitcoin surpassed the $21,000 level due to declining inflation rates. BTC gained 7.5% that day and peaked at $21,299. Sanitationan analytical platform, states that the number of Bitcoin addresses holding between 100-1000 BTC is rapidly increasing, likely putting BTC under pressure.
Santiment also revealed that more than 416 addresses contain 100-1000 BTC. It’s an increase of 3.04% in eight weeks. The influence of the whales on the market is critical as they control prices due to the size of their portfolios. In addition, the price increases caused by the whales have a more far-reaching effect on other cryptocurrencies in the market.
Bitcoin Price Prediction, A Possible Bull Run?
Glassnode data shows that Bitcoin is currently correlating with its past market cycles. For example, after the 2018-2019 bear market, BTC traded below its 200-day moving average (DMA) for 386 days. Similarly, BTC price traded below its 200 DMA in this bear market for 381 days until it broke above it.
Since the turn of the year, BTC has posted gains for twelve consecutive days. Sanitation reports that it has recorded these gains in the past eight weeks. Bitcoin short-term traders recorded their most profitable spending day on January 14 since April 2022. According to GlasnodeBTC trading volume has increased in recent months.
At the time of writing, BTC is trading at 20,788. The support levels are $20,207, $20,392, and $20,624. The resistance levels are also $21,042, $21,227 and $21,459. It is currently trading above 50 days SMA, indicating that the price will remain bullish in the near term. Also, BTC is trading above its 200-day SMA, showing long-term price appreciation.
The candlestick patterns on the chart are rising, indicating that the bulls are controlling the market. The Relative Strength Index (RSI) value is firmly in the overbought zone, 86.53. As the BTC whales are active, the RSI indicates a significant increase in buying pressure.
The Moving Average Convergence/Divergence (MACD) is above the signal line and showing divergence. It also indicates that BTC is worth buying as it will continue its advance. BTC’s long-term and short-term outlook is bullish as the crypto market recovers.
The price of BTC will likely continue to rise in the coming weeks. Expect other cryptocurrencies to follow suit, except there are negative external forces such as inflation.
But it is important to note that cryptocurrencies are volatile. If BTC loses its price momentum, it will have to rally to get back to its previous price. Cryptocurrencies remain volatile and can deviate from past behavior at any time.