Bitcoin (BTC) fell for the fifth day on Monday but climbed back near $23,000 as inflation in the U.S. began to cool down. Due to rising investor confidence that inflation is declining without causing a recession in the country, the price of BTC has increased by almost 40 percent this year.
As explained by OANDA senior market analyst Craig Erlam in a note published on Monday, Bitcoin was in relatively good shape despite the recent crypto winter.
Ethereum (ETH), the second-largest cryptocurrency by market value, also increased by 1.3 percent to trade at $1,640 yesterday. The cryptocurrency market gained one percent on the day, according to the CoinDesk Market Index.
Bitcoin, which had already hit $24,000 on a couple of occasions last week, dropped below that level over the weekend after surprisingly robust jobs data on Friday stoked fresh fears.
#Bitcoin currently on range low and could be bouncing from here.
People properly eagerly start to short, so cracking $23.2K is inevitably continuation towards $26-28K on the charts.
Best and defensive long entry; $21.5K. pic.twitter.com/9KdKvvceYl
— Michaël van de Poppe (@CryptoMichNL) February 6, 2023
As traders and investors pondered the Federal Reserve’s reaction to the jobs statistics, traditional markets started the week on a downward trend.
U.S. markets ended the day with losses across the board. During afternoon trading, the S&P 500 index was down 0.6 percent, and the Nasdaq Composite Index dropped one percent. The Dow Jones Industrial Average fell by 0.1 percent.
Eight months of hawkish half-and three-quarter-point raises by the Fed were followed by a more moderate quarter-point increase last week.
According to IDX Digital Assets chief investment officer Ben McMillan, the markets have slowly begun to respond to the idea that the Fed could not “leave rates higher for longer” because of the job data.
McMillan believes that the $20,000 level was solid technical support for Bitcoin. However, he also said that he wouldn’t be shocked to see Bitcoin test this level again.
Even if the rise was fundamentally favourable, he predicted that crypto volatility would remain high this year.