Bitcoin recently rose above $42,000 traded under $40,000 for some days. This market rally is believed to be due to various factors including recent revelations about the US economy.
Macroeconomic factors that contributed to the recent Bitcoin surge
The personal income expenditure (PCE) price index, a leading inflation indicatorwas released on January 26th and reported to have been lower than expected. This suggests that inflation in the United States is cooling and experts believe that the Federal Reserve is likely to reduce its aggressive monetary policy.
The Fed's hawkish stance is known to have an impact negative impact on the Bitcoin price and the broader crypto market. Therefore, this latest development is positive and may have prompted investors to double their investments in the flagship cryptocurrency, thereby triggering a price increase.
In the meantime, Data The US Treasury Department recently reported that the country has taken a hit debts of all time of $34.1 trillion. While this has raised concerns about the US dollar's impending crash, it has also brought Bitcoin and other cryptocurrencies into the spotlight as a place of refuge to protect against a possible devaluation of the national currency.
Interestingly, various financial analysts including renowned economist Peter Schiffhave continued to predict the impending crash of the US dollar. Against this background, Financial author Robert Kiyosaki has urged everyone to invest in Bitcoin to avoid becoming poorer due to government measures.
Another factor believed to have contributed to Bitcoin’s recent surge is the expiration of monthly BTC options contracts on Deribit. The expiry result most likely played a crucial role in the Bitcoin rally considering CryptoQuant CEO Ki Young Ju had determined exactly The derivatives market is being blamed for Bitcoin’s recent decline.
BTC price rises after downtrend | Source: BTCUSD on Tradingview.com
GBTC outflow is slowing for the fourth consecutive day
Grayscale's GBTC seen an outflow of just $255.1 million on Jan. 26, continuing a recent trend of smaller outflows from the fund. NewsBTC reported as the Bitcoin ETF recorded outflows of $515 million, $429 million, and $394 million on January 23, 24, and 25, respectively.
As written down from Bloomberg analyst James SeyffartJanuary 26th also happened to be the lowest outflow day for GBTC since switching to a Spot Bitcoin ETF. This development suggests that the fund's investors may be wary of taking profits. It is also important because Grayscale has contributed to the selling pressure that has plagued Bitcoin recently.
At the time of writing, Bitcoin is trading at around $41,700, up over 4% in the last 24 hours, according to data from CoinMarketCap.
Featured image from U.Today, chart from Tradingview.com
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