finbold.com
The cryptocurrency market has experienced a massive influx of capital in 2023, helping the sector take initial steps towards exiting last year’s bear market. At the moment, there is interest regarding the rally’s sustainability, considering the industry is still faced with several headwinds.
In particular, as of February 8, the global crypto industry controlled a market capitalization of about $1.086 billion, representing an inflow of about $291 billion from the $795 billion recorded on January 1, according to data by CoinMarketCap.
Indeed, the rally has helped the market reclaim the crucial $1 trillion valuation led by established assets such as Bitcoin (BTC) and a host of altcoins that demonstrated a price breakout.
Notably, Bitcoin has rallied almost 40% in 2023, with the asset briefly reclaiming the $24,000 price level after breaching the $23,000 resistance. By press time, BTC was valued at $23,169, having gained by less than 0.5% in the last seven days.
Other assets that have stood out in 2023 include Aptos (APT), Fantom (FTM), and Solana (SOL) as well as AI-linked coins.
Can the crypto market sustain the 2023 gains?
It is important to note that the global crypto market has rallied after positive developments in macroeconomic-related activities. For instance, Bitcoin briefly touched $24,000 after the United States inflation slowed, translating to a slowdown in Federal Reserve interest rate hikes.
At the same time, Fed Chairman Jerome Powell noted that the institution had begun a disinflationary process. Consequently, the development is likely to soothe investors who are betting on inflation to fall and turn on risky assets such as Bitcoin.
Furthermore, with Bitcoin playing a crucial role in market trajectory, the asset has exhibited several trading patterns that could hint at what is coming. In this case, BTC recently confirmed the golden cross trading pattern that has historically signaled a bullish momentum. For instance, the pattern was exhibited just months before the 2020 and 2021 rallies.
Bearish sentiments
On the other hand, the maiden crypto is plagued by bearish sentiments highlighting the current uncertainty in the market. As reported by Finbold on February 7, Bitcoin saw 1.85 million addresses buy 1.13 million BTC for an amount ranging from $22,987 to $23,662. With Bitcoin struggling to hold gains above $23,000, the onchain development could signal an imminent sell-off.
Notably, investors also appear to be bearish on the asset’s subsequent trajectory, with over 4,000 American adults projecting that Bitcoin might trade slightly above $15,000 in the next six months.
In the meantime, the market conditions largely remain uncertain. Still, it will be worth keeping an eye on other factors such as institution adoption and legal aspects like the outcome of the Ripple and Securities Exchange Commission (SEC) case.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.