Bitcoin, the largest digital currency by market capitalization, is rebounding nicely to start 2023 following a dreadful run last year, and as it hovers around $23,000, some market observers are pondering the veracity of the latest run and whether or not it marks the dawn of a new bull market.
Using the strict definition of a bull market, bitcoin is already there, having surged roughly 40% off its November lows, but there’s still a mountain to climb for the cryptocurrency to get anywhere close to its all-time highs around $69,000. It remains to be seen if those levels will be flirted with this year, but some market observers highlight shifting sentiment that could benefit bitcoin and other digital assets.
“2023 has ushered in a sea change in sentiment. Investors are optimistic that inflation is cooling and that interest rates may even start coming down this year, with traders bidding up risk-sensitive assets like cryptos and stocks in turn,” reported Jack Denton for Barron’s.
Improving sentiment coupled with the pivotal factor of bullish price action is adding some good vibes to bitcoin’s technical picture, which potentially portends more upside.
“This upbeat attitude has now translated into bull market technicals, according to CryptoQuant. The tell is in the group’s proprietary PnL Index, which combines three different metrics into a single indicator of Bitcoin’s market value. That figure has now climbed above its 365-day moving average,” according to Barron’s.
There are other points in bitcoin’s favor. First, the digital currency’s rebounds are often significant on a percentage basis, as the current one is proving. Second, bitcoin’s bull markets have, historically, been lengthy.
That’s not to say the environment is 100% perfect for bitcoin. A recent survey by crypto education website Coin Kickoff indicated that international investors, mostly retail, rank bitcoin as their most-hated cryptocurrency. Conversely, they’re enthusiastic about ethereum and solana.
“While Ethereum’s value has been prone to the same volatility and price slumps as the rest of the industry in 2022, there is renewed optimism about crypto’s second-largest currency. In October 2022, it completed ‘The Merge,’ "replacing the digital machinery":https://www.coindesk.com/tech/2022/09/15/the-ethereum-merge-is-done-did-it-work/ at the heart of its blockchain to consume 99.9% less energy. While there is far from consensus, many in the cryptocurrency industry believe Ethereum and its versatility with DeFi projects has the potential to one day surpass Bitcoin as the most prominent and valuable coin,” according to the research firm.
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