Bitcoin extended gains over the weekend ahead of the Lunar New Year holiday and Spring Festival celebrations across Southeast Asia, rallying to its highest level since August.
Data from CoinMarketCap shows that the leading cryptocurrency soared above $23,000 on Saturday, up 10% at one point from the day before. The coin has reached a local high of around $23,282, a level not seen in more than five months. As of now, bitcoin is trading around $22,900, which has been roughly flat over the past few days.
The second-largest cryptocurrency, Ethereum, also registered significant gains, reaching a local high of around $1,674, a level not seen since September last year when its much-anticipated merge upgrade took place. The total market cap has crossed the $1 trillion mark.
The rally comes as bitcoin has historically performed well at the start of the Lunar New Year holiday, often referred to as Chinese New Year, celebrated across Asia. According to Marcus Thielen, head of research at Matrixport, the Lunar New Year holiday is considered a good entry time for investors. he Told,
“Buying bitcoin at the end of the first day of Chinese New Year and selling it 10 trading days later would return +9% on average, showing positive returns over the past eight years (2015-2022). has been an attractive entry time for
Bitcoin and Ethereum are up about 38% and 35% year-to-date. While a mix of factors may have influenced crypto’s impressive start to the year, the market managed to catch up Inflation showed signs of easing after new data released last week by the US Labor Department.
The annual inflation rate fell to 6.5% in December, compared to 7.1% in November. Low inflation is generally seen as bullish for risk assets like crypto as it puts pressure on the US Federal Reserve to slow down interest rate hikes.
Meanwhile, crypto bulls expect the crypto market to continue its upward trajectory, with Sean Farrell, head of digital asset strategy at Fundstrat, expecting bitcoin to reach between $35,000 and $44,000 this year, and Ethereum $2,400. to between $3,200. However, he still cautioned investors to be mindful of near-term risks. he said:
“Despite our view that absolute downsides are in for the majors, we still believe there are some near-term risks to be mindful of. These include additional downside from the DCG, another swipe at risk assets at the next FOMC meeting, and The fact is, despite the recent rally, we are still in the middle of what we would consider an on-chain bear market.
Bitcoin Crypto Related Post