Why Bitcoin rose

On January 30, the price of Bitcoin hit a new local high of $23,950, a record for the past six months. That said, the major cryptocurrency is still failing to consolidate above $24,000, as the cryptocurrency’s value has corrected after reaching a new high. This morning, the BTC exchange rate is at $23,000.

15-minute chart of Bitcoin exchange rate

This rise is enough for another record – Bitcoin’s best first month yield of the year in the last decade. Only in 2013 did the cryptocurrency manage to post a higher figure during January.

Bitcoin yield by month

Note that a previously positive January ended a good year for BTC and other cryptocurrencies in general. We would like to believe that this case will not be an exception, well, the digital asset market itself has already passed its bottom.

Bitcoin price performance by month. A good January usually resulted in a serious rise

Now all cryptocurrency enthusiasts' discussions are focused around the upcoming decision to raise the US Federal Open Market Committee (FOMC) rate at the February 1 meeting. This event will lead to increased volatility, with cryptocurrency price movements dependent on new announcements in Federal Reserve policy.

A popular crypto trader nicknamed Crypto Chase posted the following chart on Twitter, showing the likely movement of Bitcoin’s price amid news of the FOMC meeting.

Crypto Chase forecast

Another crypto-enthusiast under the nickname Crypto Tony believes a possible Bitcoin breakout above the $25,000 level is important. Here’s the trader’s relevant rejoinder, cited by Cointelegraph.

The 200-week EMA line sits directly above us at the $25,000 level, which as you know is my target for Bitcoin. A break above the 200 EMA and the high of the range is a big deal for the bulls, but the acemoon hasn’t happened yet and people are already in euphoria.

As is traditional, let us remind you that any forecasts from traders and analysts - including the most experienced ones - do not have to come true. They are just an illustration of a possible scenario according to the point of view and mood of the expert. So it is worth taking them accordingly.

Crypto Tony forecast

Recall, earlier we wrote about the benefits of investing in BTC on the backdrop of the Chinese New Year. Perhaps, investors’ expectations from the trend of this holiday were additional fuel for the cryptocurrency’s growth the day before.

US credit rate

The main macro event this week will be the aforementioned FOMC meeting. This time, experts have reached a consensus that the US Federal Reserve will raise the benchmark lending rate by 25 basis points or 0.25 percent. According to FedWatch Tool, there is a 98.9 per cent probability of such an increase.

Probability of the next rate hike

Recall that the rate was raised by 50 basis points in December although it had previously been raised by 75 basis points since the summer of 2022. A possible increase of 25 basis points does not mean that the economic and inflation problems are over as the consequences of the rate hike on the previous day are yet to be seen. However, such a trend reversal might in any case signal the passing of the peak of difficulties in the economy and the willingness of the authorities to deal with them in the future.

Influencer under the nickname Satoshi Flipper believes that the news around the FOMC is unlikely to result in serious turbulence in the market. Here’s his rejoinder.

We already know that the rate will be raised by 25 points. So what’s even left for Powell from his speech? Maybe promises of a 25 or 50 point rate hike by the end of the year? The worst is already behind us.

US Federal Reserve Chairman Jerome Powell

Traditionally, after the FOMC meeting, US Fed Chairman Jerome Powell will address the press conference. His speech could also affect cryptocurrency rates, as Powell usually hints at Fed policy changes for the foreseeable future. That is, if he talks about a possible slowdown in rate hikes, cryptocurrencies could react positively.

Investors are not selling Bitcoin yet

Since the beginning of the year, the price of the main cryptocurrency has already risen by tens of percent, so one would expect massive sales of BTC to lock in profits. However, analysts at the Glassnode platform have noted relatively low activity in Bitcoin sales so far.

The coins, which have remained in wallets for at least five years, reached a new all-time high of 27.85 percent in relation to total supply the day before. Accordingly, this is the volume of crypto that has not moved for quite some time. And while some portion of these coins is clearly lost, the move over five years should hardly be surprising.

Dynamics of the share of active bitcoins in circulation

At the same time, the number of coins lost or held for a long time has also reached the highest level in the last five years.

Lost coins

However, at lower time intervals, the supply volume active in the last 24 hours has reached its lowest level in the last month. Despite this, the feeling of greed is quickly spreading among traders, as most expect the bull run to continue.

Fear and Greed Index

The indicator data from Alternative shows the market entering the greed stage. Yesterday it reached 61 points out of 100, though today it has fallen to 51 points given the niche’s drawdown.

Bitcoin Investors’ Fear and Greed Index

By comparison, back on 1 January this year, the index only reached 26 points. Consequently, changes in the digital asset market have traditionally been very rapid.

Fear and Greed Index dynamics


We believe that the worst for the cryptocurrency market may indeed have passed. Still, Bitcoin, along with other coins, are now quite far from their recent bottom, and cryptocurrency rates are bouncing back rather quickly after collapses. Of course, we cannot rule out the possibility of a pandemic-like unexpected event in early 2020, but the situation is tentatively stabilised now. Whatever the case may be, we will find out the real scenario in practice.