Bitcoin Pumping since early 2023. The world’s first and largest cryptocurrency by market capitalization was last changing hands near $21,000, marking an astonishing 27% gain so far this month. That means Bitcoin October is on course for its best monthly gain since 2021, while there are still 15 days left in the month.
In light of the recent boom, Alttern.me’s popular bitcoin fear and greed index “Fear” dropped out for the first time since April 2022 over the weekend, hitting 52 before falling back to 45 on Monday.
The latest rally has attracted the usual predictable skepticism Bear on social media, many of whom are dismissing bitcoin’s recent recovery as a “bull trap.” In fairness, selling out rallies was the playbook for 2022.
This rally could be different
But 2023 is going to be a very different year from 2022. 2022 was a year characterized by 1) large reverse inflation in major global markets such as the US and Europe and 2) aggressive subsequent rate hikes from the likes of the US Federal Reserve and the European Central Bank. Recent changes in economic data, particularly in the US, suggest that 2023 is more likely to be a year of inflationary surprises and easing expectations of Fed tightening.
As a result, it Latest bitcoin rally feels different, A closely followed options market indicator shows that investors have become the most optimistic on the outlook for bitcoin’s six-month performance since the start of 2022.
Bitcoin’s 180-day call-put skew turned into positive territory on Monday for the first time in over a year, according to crypto derivatives data analytics firm Emberdata. This means that a bullish cash option expiring in six months is worth more than a bearish put option of the same expiry.
“We view the current rally in digital assets as a market reversal and not a bear market rally,” Mark Connors, head of research at 3iQ, said in a recent email to clients. Connors said recent less hawkish remarks from Fed policymakers suggest that the sharp 2022 money supply reduction may be coming to an end.
These Indicators Suggest Crypto Winter Turning to Spring
Other widely followed technical indicators are also supportive of the idea that the crypto winter may end in the end. First, bitcoin is back north of its 200-day moving average for the first time since December 2021.
Just as April 2021’s failed attempt to get back above the 200DMA ended up as a major market turning point (Bitcoin will fall a further 67% in 2022), Bitcoin bulls are hoping the January bullish 200DMA signal the beginning of the break. Could be a new bull market.
According to Glassnode, “Since the 200-day SMA is widely observed by market analysts, it carries significant weight on investor psychology when it is definitively broken … It is often considered the minimum macro bull/bear boundary level.” goes”.
Meanwhile, bitcoin’s latest rally has also sent it back north of its true value for the first time since early November, which according to Glassnode stood at around $19,700. This means the average bitcoin holder is now holding an unrealized profit and is “under a small degree of acute financial stress”.
According to data from Glassnode, bitcoin is back north of both its 200DMA and real value for the first time since December 2021.
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