CoinLoan Weekly: Crypto soaring, BTC’s best start since 2020, macro optimism

Price dynamics

BTC price

The Thursday surge followed the release of December CPI figures by the Bureau of Labor Statistics. The data showed the first monthly inflation decline in almost three years — by 0.1% — in continuation of year-over-year moderation. The rate of annual increase has slowed to 6.5% against 7.1% in November. Following the release, all three equity indexes and digital assets moved upward. The Crypto Fear & Greed Index peaked at 52 ( neutral) on January 15 but has since descended to fear at 45. The last time it hit 52 was on May 31, 2022.

As of this writing, BTC is changing hands at $21,339.51, with a 24-hour gain of +2.2% and 7-day growth of +25.0%.

BTC price chart. Source: CoinGecko

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ETH price

A crucial Ethereum upgrade scheduled for March — the Shanghai hard fork — will enable network participants to unlock their staked Ether, an opportunity they have anticipated for months. Whether they will subsequently sell their coins or double down on staking remains to be seen. Opinions about the potential impact vary, with some experts predicting a downside move. Meanwhile, the number of shark addresses has increased by 3,000 since November 2022, supporting the current rebound.

As of now, ETH is worth $1,593.69, with a 24-hour rise of +2.8% and a 7-day jump of +24.1%.

ETH price chart. Source: CoinGecko

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XRP price

According to WhaleStats, XRP has become the second most popular crypto among the top 1,000 BSC whales, behind LYO. So far, technical analysts have detected more bullish price action against USDT than BTC. Aside from the general sentiment, the price may have reacted positively to the Flare Network airdrop, which distributed the first portion of FLR tokens on January 9. Flare, a layer 1 blockchain on EVM, is bringing smart contract functionality to Ripple.

At press time, XRP is trading at $0.392466, with a 24-hour rise of +1.8% and 7-day growth of +13.7%.

XRP price chart. Source: CoinGecko

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Cryptocurrency news

January brings BTC’s best start since pre-pandemic era

Meanwhile, the overall crypto market cap has risen past $1 trillion, a level it saw before the FTX implosion. Along with Bitcoin, a gauge of the top 100 digital assets lost over 60% in 2022, raising questions about the future of the industry.

Interpreting the surge

Technical analysts note that the latest jump appears stretched. The coin’s 14-day RSI (relative strength index) is at a two-year high above 90, while 70 is already regarded as overbought. Katie Stockton, co-founder of Fairlead Strategies, does not believe prices will likely surpass $21,500 due to “deeply overbought short-term readings [that] challenge positive momentum.”

Doubts about sustainable momentum

Furthermore, Crypto Quant’s Ki Young Jun told The Block that futures traders might have been exploiting short-term liquidity gaps. If this is the case, the rally should fizzle out soon, although “we’re close to the bottom for sure.” In the absence of several big players, BTC futures worth around $4 billion were bought early on Saturday, January 14.

Not out of the woods yet

Optimism around inflation drives markets

According to the University of Michigan, short-term inflation expectations in the US have plunged to the deepest low in almost two years. The year-over-year consumer price change of 6.5% in December is the slowest in over 12 months. This cooling down is bringing the Fed closer to 2% inflation, stoking hopes of moderation in its subsequent interest rate hikes.

Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office, interprets the data as “another sign that inflation is heading in the right direction and […] the peak is likely in the rear view.” Yet the regulator may require other unequivocal signs of slowing, as “[…] it is still well above the Fed’s target rate, and the Fed has remained adamant that they will keep rates high to bring inflation back to normal levels.”

Following the encouraging news, the Nasdaq 100 stock index was on a six-day upward streak. Cryptocurrencies also performed well, “suggesting that crypto’s correlation to macro is not going away anytime soon,” according to Sean Farrell, Fundstrat’s head of digital asset strategy. Furthermore, provided the Digital Currency Group avoids forced liquidations, “there is a high probability that the absolute bottom is in for crypto prices.”

Furthermore, the inflation slowdown is not the only growth driver. Hayden Hughes, CEO of social-trading platform Alpha Impact, told Bloomberg, “Markets have plenty of positive momentum heading into the next FOMC meeting later this month.” In particular, cryptocurrencies have reacted positively to the recovery of $5 billion in liquid assets from the troubled FTX exchange. Thus, although the overall macro pressure “is still bearish,” last week gave the financial markets “plenty of factors to forget” it.


The information provided by CoinLoan (“we,” “us,” or “our”) in this text is for general informational purposes only. All investment and financial opinions expressed by CoinLoan in this text are from the personal research and open information sources and are intended as educational material. All outlined information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in this text.

Originally published at on January 17, 2023.



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