Yesterday, Bitcoin (BTC) had a positive performance for the fourth consecutive day, although it was rejected at the $18,300 level. However, the asset seems likely to finish the day with its winning streak still in progress.
Bitcoin Surges Above $18,300, Over 60% of Supply Now in Profit Following Dip Below $17K
Following the recent decline from the peak of $21,388 on November 5th, more than half of the circulating bitcoin supply was in loss, with 47% to 48% in profit, according to data from Glassnode. However, today the asset saw an increase above $18,300 for the first time since December 14th, which substantially increased the supply in profit to 60.5%.
The CryptoQuant BTC: Supply in Profit indicator also shows this significant increase. As per Glassnode, this sharp uptick in the metric further supports the idea that most BTC tokens were acquired between the $16.5k and $18.2k price points.
As #Bitcoin rallies to $18.2k, over 13% of the Circulating Supply has returned to profit.
— glassnode (@glassnode) January 12, 2023
The observed sharp move upwards in this metric helps to confirm that a large volume of $BTC was acquired between $16.5k and $18.2k.https://t.co/yflZloDbSP pic.twitter.com/J8egLvYt3w
Recommended reading: 5 Tips for Beginner Bitcoin Traders
(Image credit: logll.com)
Experts Divided on Whether Recent Bitcoin Breakout Signals End of Bear Market or a Rally
With the recent breakout in value, industry experts are divided on whether the upward trend is a temporary rally within a bear market or a sign that the bear market has ended. Regardless, sentiment has improved, with the Coinbase Premium indicating strong buying pressure from both retail and institutional investors in the U.S. Additionally, the decrease in the amount of BTC held in reserves on exchanges suggests a low level of selling pressure among investors.
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Bitcoin Breaks Above $18k as Analysts Forecast Uptick in Sentiment and U.S. Macroeconomic Climate
The break above $18,000 in Bitcoin value was anticipated by many analysts yesterday, following a three-day positive performance and a positive outlook on the U.S. macroeconomic climate. The nonfarm payrolls report from last Friday played a role in the improvement in sentiment, as payrolls increased by 223,000 in December, surpassing the estimate of 200,000. Additionally, the unemployment rate decreased by 0.2% to 3.5%.
Furthermore, the recent developments in the FTX saga also contributed to a sense of relief in the crypto community, as the company’s lawyer, Andy Dietderich, disclosed that it had recovered over $5 billion in liquid assets.
Experts Expect Decrease in Inflation and Interest Rate Hike Slowdown in U.S. CPI Report Impacting Bitcoin Demand
With the U.S. Consumer Price Index (CPI) report set to be released today, industry experts anticipate a decrease in inflation from the November rate of 7.1% to 6.5% in December. If this or a lower value is confirmed in the report, the Federal Reserve could slow down its interest rate hike in the next meeting, easing pressure on risk assets such as Bitcoin.
These expectations have fueled bullish sentiment and renewed interest among investors, leading to an increase in demand. Last week, Glassnode observed an uptick in the number of small BTC addresses following the asset’s strong start to the year. Bitcoin is currently trading at $18,167, up 4% in the past 24 hours.
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Frequently Asked Questions
Yesterday, Bitcoin had a positive performance for the fourth consecutive day, although it was rejected at the $18,300 level. However, the asset seems likely to finish the day with its winning streak still in progress.
Following the recent decline from the peak of $21,388 on November 5th, more than half of the circulating bitcoin supply was in loss, with 47% to 48% in profit, according to data from Glassnode. However, today the asset saw an increase above $18,300 for the first time since December 14th, which substantially increased the supply in profit to 60.5%.
Industry experts are divided on whether the upward trend is a temporary rally within a bear market or a sign that the bear market has ended.
Factors that contributed to the improvement in sentiment include the nonfarm payrolls report from last Friday, which showed an increase in payrolls and decrease in unemployment rate, as well as recent developments in the FTX saga, which provided a sense of relief in the crypto community.
If the report confirms a decrease in inflation from the November rate of 7.1% to 6.5% in December, the Federal Reserve could slow down its interest rate hike in the next meeting, easing pressure on risk assets such as Bitcoin, which in turn could fuel bullish sentiment and renewed interest among investors, leading to an increase in demand.
