- Bitcoin price has rallied over 30% in three consecutive weeks for January.
- BTC has paired back a substantial part of the decline in the crypto winter of 2022.
- Bitcoin bulls in the trade enjoy the profits but have an issue cashing them in.
Bitcoin (BTC) price has advanced substantially in the first weeks of the year as global markets kept deaf, dumb and blind to the warnings of the central bankers that with the new year, all problems for 2023 will be suddenly erased. Inflation will remain a big topic for 2023, as central bankers might be right that inflation is nowhere near where it needs to be. Markets have been too eager to price in the current declines as being a straight line to the downside, meaning that markets would or want to quickly pop higher towards their all-time highs, which seeing the current situation, is not likely.
Bitcoin price set for cold fever as inflation is set to spike
Bitcoin price will see traders learning to deal with reality the hard way. While markets have been eager to price in an almost linear decline of inflation back to 2%, the fact could be not much further from the truth as it is now. Traders not paying attention to what is going on have missed that layoffs are picking up speed. Several car manufacturers are laying off and shutting down production lines for several new car models with technical furlough as another chip shortage is setting back deliveries by 3 to 6 months at least. This will ramp up the prices for second-hand cars again and drive inflation back up.
BTC will first receive a blow from the central banks set to make their appearance at the beginning of February, towards $20,000. Pressure will mount and could see Bitcoin price action decline towards $16,020 should Producer Price Indexes or inflation numbers climb instead of dropping further with a big rotation out of risk assets. Traders will quickly exit their long positions as the next profit level at $28,695 is too far off and unreachable under these conditions.
BTC/USD weekly chart
Chip shortage is, of course, just one segment of the economy, as several commodity prices are currently coming off their highs. The same goes for US rates and the US dollar, which has seen the whole segment price lower or weaker in the relevant asset. Should the Fed confirm next week that the market is right and rate cuts are set to kick in for 2023, expect a sigh of relief and a ‘steady as she goes’ rally with hesitant last-minute bulls to join the rally and push price action further up with BTC set to reach $28,695 in a matter of weeks, maximum two months.
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
Why crypto may see a recovery right before or shortly after Bitcoin halving
Cryptocurrency market is bleeding, with Bitcoin price leading altcoins south in a broader market crash. The elevated risk levels have bulls sitting on their hands, but analysts from Santiment say this bleed may only be cauterized right before or shortly after the halving.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network (MANTA) price was not spared from the broader market crash instigated by a weakness in the Bitcoin (BTC) market. While analysts call a bottoming out in the BTC price, the Web3 modular ecosystem token could suffer further impact.
Bitcoin price uptrend to continue post-halving, Bernstein report says as traders remain in disarray
Bitcoin is dropping amid elevated risk levels in the market. It comes as traders count hours to the much-anticipated halving event. Amid the market lull, experts say we may not see a rally until after the halving.
OMNI post nearly 50% loss after airdrop and exchange listing
Omni network (OMNI) lost nearly 50% of its value on Wednesday after investors dumped the token following its listing on top crypto exchanges. A potential reason for the crash may be due to the wider crypto market slump.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.