- Bitcoin’s rebound above $21,000 in January has resulted in euphoria, market participants are optimistic for the second time after July.
- The overall supply of BTC on exchanges has dropped from 11.85% to 6.65% Year-on-Year, signaling a rise in self-custody and a decline in selling pressure.
- Experts believe Bitcoin’s rally is a signal of a bigger bullish breakout in 2023.
Bitcoin price climbed above the key $21,000 level on January 18, after the release of lower-than-expected US inflation data in the form of the Producer Price Index (PPI), fueled a bullish narrative for risk assets, including cryptocurrencies, among investors. Based on data from crypto aggregator Santiment, the level of euphoria among traders is now the second-highest since July 2022, when the inflation outlook had also moderated and the US Federal Reserve was hinting at reducing the pace of interest rate hikes .
BTC holders believe the recent Bitcoin price rally is a sign of an imminent bullish breakout in the asset in 2023.
Also read: Bitcoin recovery fuels NFT growth, digital collectibles garner big interest as BTC crosses $21,550
Bitcoin optimism among traders climbs, is BTC price ready for a breakout?
Bitcoin price wiped out losses from the FTX contagion and hit a four-month peak of $21,576 on January 18. The asset’s climb above the $21,000 level generated elevated levels of euphoria among market participants, according to Santiment, a market sentiment data provider. Bitcoin’s rebound above the key level marked the second-highest level of optimism since July.
Euphoria among BTC traders
Another sign investors are more bullish on the leading crypto is that the overall supply of Bitcoin on exchanges has dropped, suggesting selling pressure on the asset will ease.
Crypto exchange balances of Bitcoin declined
The Year-on-Year BTC supply has dropped from 11.85% to 6.65% signaling a rise in self-custody. This suggests investors are hoarding the asset ‘off exchange’ for the long-term and has further fueled a bullish narrative for Bitcoin.
Experts believe Bitcoin is preparing for a bullish breakout in 2023
Bitcoin market participants believe the asset’s recent gains, yielding 30% to holders in the two-week period between January 3 and 17, is a precursor of a bullish breakout in 2023.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.