The price of Bitcoin (BTC) was trading at around $23,000 at the end of the first month of the year. January’s track record is largely positive for the cryptocurrency, and new data is providing insight into this month’s rally.
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February begins with a crucial date for the markets
The price of Bitcoin was climbing to the $23,216 mark on Bitfinex, on January 31st, 2023. The cryptocurrency was trading at $23,073 at the time of writing. Its price is currently recording a daily gain of 1.03%.
This brings Bitcoin back to the $23,000 mark, after the sharp bearish correction, on January 30th, 2023, which saw its price drop to the $22,516 mark. The 5-hour chart of the cryptocurrency’s price shows that the Ichimoku Kumo (cloud) is acting as a support, stopping the previous day’s fall, and supporting the current rise.
On a monthly basis, the price of Bitcoin is expected to close above the Tenkan Sen in this period.
Regarding this monthly close, trader Rekt Capital again highlighted earlier today, the fact that the cryptocurrency is “struggling” to end the month “above the $23,400 resistance”.
Bitcoin could close this month below that level. Nevertheless, by holding above $23,000 at this monthly deadline, the price of Bitcoin would then record a gain of nearly 39% in January.
In today’s Twitter posts, analyst Willy Woo attempts to explain the reasons behind this January rally, which would coincide “with the emergence of a new pattern of stablecoin inflows into crypto exchanges during business days only.”
BTC prices: the institutions behind the rally
Willy Woo sees this as a signature “big institutions buying.” Based on trading hours, he deduces that these buyers are “Western institutions in the US and Europe.”
However, the Bitcoin Archive Twitter account questioned Willy Woo about the basis for his theory, which would be based on the fact that these institutions are using stablecoins for their purchases, “while they have access to a deep liquidity in their home currencies.”
The analyst responds that the existing crypto funds “have remained in stablecoins.” He recalled that the funds are in contact with crypto banks like Silvergate or Signature Bank. The former suffered a bank run, while the latter reduced its exposure to cryptocurrencies during these bear markets.
Willy Woo concluded that stablecoins were “the best place to hold USD in recent months.”
A FED-led start to the month for Bitcoin prices
The Bitcoin price will start in the month of February with the FOMC meeting. According to the CME FedWatch Tool, the probability that the US Federal Reserve (FED) will raise federal funds rates by 25 basis points soon, currently stands at 98.9%, compared to 1.1% for a hold on current rates.
If the Fed confirms this 25 basis point hike, will risky assets like Bitcoin benefit, or have the markets already anticipated such a decision in their January purchases, which would then have no impact when announced?
Logically, a lack of upside – highly unlikely given previous figures – would be unexpected and strongly positive news. The scenario to fear for risky assets would be announcements from the FED in the direction of a rate hike above those 25 basis points.
The price of Bitcoin is recovering from the pressure of the previous day. Although January was largely in the green, the bullish continuity was halted by the resistance of around $23,400 and $24,000. Will the bulls have the opportunity to attack these key levels again in February?
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First published in JOURNAL DU COIN, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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