The crypto markets entered the new year on a positive note. Bitcoin (BTC), the original cryptocurrency, crossed the $20k mark for the first time since the FTX collapse in early November.
Due to increased buying pressure over the past week, over $73 billion in funds have flowed into Bitcoin (BTC). Moreover, BTC’s market cap crossed the $410 billion mark, while the larger global crypto market cap surpassed $1 trillion.
On January 8th, BTC’s market cap stood at about $326.1 billion. The increased cash influx is helping boost Bitcoin’s value, which has risen nearly 22.1% in the last seven days. BTC reached a high of more than $21,000 on the weekly chart on January 14. Notably, Bitcoin’s momentum has resulted in one of the asset’s longest winning streaks in over two years.
The latest rally is attributed to the lower-than-expected CPI (Consumer Price Index) numbers for December, at 6.5%.
Will Bitcoin continue to rally?
Regardless of the rally, uncertainty still looms over Bitcoin and might undo the recent gains. For instance, crypto businesses have not yet fully recovered from the effects of the macroeconomic climate, as seen by their recent announcement of several layoffs. Moreover, there is a potential formation of a House subcommittee on cryptocurrencies by the United States.
However, the crypto industry looks to be leaning in the direction of optimism based on the overall market mood monitored by the Fear and Greed Index. The index still points towards investors being in “fear.”
Analyst Michal van de Poppe emphasized that Bitcoin is still dealing with significant developments that might affect the current rally. He advised investors to keep an eye out for data that impacts overall economic health, such as retail sales, in a YouTube video that was published on January 13.
He added a warning that even if inflation figures are slowing down, the Fed may still raise rates if the general state of the economy is weak, which might impact consumers’ purchasing power.
At press time, BTC was trading at $20,853.84, up by 0.7% in the last 24 hours. Bitcoin is still 69.8% below its all-time high of $69,044.77, attained in November of 2021.