January 16th, 2023 – The crypto market regained the $1tn market capitalization as Bitcoin rose +20% in 7 days, testing $21k and pulling the rest of the market. The rally intensified after inflation data confirmed a price drop last week. A popular market sentiment indicator called the “Fear & Greed Index” left the fear zone for the first time in nine months, remaining in neutral territory for now. However, some analysts believe that the Bitcoin price rally should not be sustainable, as it was the result of liquidation of short positions. The concern is that the opposite may happen with long positions now taken in the wake of the rally at the beginning of the year.
Our expectation is that there will be some profit-taking in the short term, which could hold back prices. However, until the US interest rate decision on February 1st, we do not expect much volatility. If the Fed reduces the pace of interest rate cuts, the price rally could persist for longer. Amid the market price rise, the native token of the Solana network (SOL) has risen over 100% in the year, returning during the weekend to be among the top 10 cryptocurrencies in the market, with investors betting on blockchain fundamentals even after the collapse of FTX, which was one of its main supporters.
- Bitcoin tests $21k and rises 20% in the last 7 days
- Bitcoin leaves the fear zone for the first time in 9 months
- Some analysts still expect a drop in Bitcoin before recovery resumes
- Solana rises +100% and returns to top 10
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