Crypto market cap goes above $1 trillion for the first time since November 2022

• Bitcoin is up almost 40% from its low in November.
• The S&P 500 index (SPX) has also done well so far this year, but its rise of about 4% has been more modest.
• In January, the US dollar index (DXY) continued to fall and fell by more than 1%.
• Expectations that the U.S. Federal Reserve might scale back its rate increases as inflation slows down may have contributed to the shift in sentiment toward risky assets.
• The price of Ether (ETH) is being rejected around the $1,650 price level, but it’s a good sign that the bulls haven’t given the bears any ground.
• In addition, the tech-heavy Nasdaq 100 index rose 5.1% between January 20 and January 23, supported by investors’ optimism regarding China’s reopening to foreign trade.
• Gas prices in Europe were able to decline back to pre-war levels owing to a mild winter.

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On November 21st, 2022, the price of Bitcoin (BTC-USD) hit a significant low of 15,479 USD, capping a brutal 14-month bear market. The Grayscale Bitcoin Trust hit its low point on that day at 7.46 USD. Prices have since fluctuated sideways for about six weeks. However, Bitcoin has soared over the past two weeks, reaching almost 21,600 USD as of yesterday. A regime change appears to have taken place. Since the beginning of November, Bitcoin had hardly responded to the constant stream of bad news coming from the collapsing cryptocurrency industry.?

However, many altcoins experienced new lows. At the same time, public opinion was severely damaged and Bitcoin was loathed. The stellar rally quickly raised prices from around 16,00 USD to around 23,000 USD. Everybody who did not invest is now trying to catch the rally. Furthermore, those who have even shorted Bitcoin are now hoping for a sizable decline. However, despite the substantial increase, market participants’ attitudes are still pessimistic. This stage of the market can be best described as “Disbelief.”

Bitcoin: Unspent Transaction Outputs (UTXOs)

It is frequently stated that Unspent Transaction Outputs (UTXOs) are the basic building blocks of Bitcoin. Since the Bitcoin network is based on an accounting model based on unspent outputs, they can be used to figure out how the network is doing and how big it is getting. Changes in the total amount of money settled through UTXOs, the number of them, and the percentage of them that are making money or losing money can show where the network is and where it is going.

Analysis of Bitcoin UTXOs showed that the number of UTXOs has been growing steadily since 2018. Even though prices have gone up and down, the number of outputs that haven’t been spent keeps growing. This is happening even though the bear market is still going on. Positive growth in the UTXO set shows that more people are using the network, while negative values show that fewer people are using the network.

Bitcoin Price Analysis:

Bitcoin has surpassed the 200-SMA on the daily time frame chart (Simple Moving Average). Therefore, a pullback could start between about 23,000 USD and 24,500 USD. Overall, the weekly chart is unmistakably bullish and points to further price increases in Q1-2203 to levels above $25,000 per unit. The initial pullback should be absorbed by the support region between 18,000 and 19,500 USD. Given the brutal 14-month bear market and the availability of numerous instruments and derivatives for trading Bitcoin, there were probably more short sellers than ever at the November low. These short sellers, who are currently steadily going further in debt, will soon turn into buyers and could easily drive Bitcoin prices up to 25,000 USD. Since the beginning of the bear market in November 2021, sentiment has significantly improved for the first time. The Crypto Fear & Greed Index is currently showing a fairly balanced or neutral sentiment at 52 points.

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