After months of bear market gloom, the cryptocurrency market has decided to start 2023 on a high note. Bitcoin (BTC) is having one green day after another with another +12% rise yesterday, dragging all the altcoins behind it. When will this rise end?
The crypto market is exploding
As is often the case, the cryptocurrency market is unpredictable. After an exceptional week of bullishness, the Bitcoin (BTC) price has once again given us a bullish rally. The king of crypto-currencies closed yesterday 5.8% positive and started Saturday 14 January with a huge bullish candle of +6% in one hour.
This is the seventh day in a row that the market has been in the green, the first time in several months. But more importantly, Bitcoin reached $21,500 overnight, a symbolic level not seen since early November and the FTX affair.
Bitcoin’s price evolution in daily time scale
Altcoins have obviously followed suit. Solana’s SOL ended the day up over 31% and is up 72% this week. As for Avalanche (AVAX), the timing of the announcement of its partnership with Amazon was excellent as it allowed it to appreciate by +51% in 7 days.
Other assets also showed similar or even more exceptional performance: Decentraland (MANA) at +85%, Aptos (APT) at +106%, Curve (CRV) at +50%, Gala (GALA) at +120%… In short, a performance worthy of a bull market
Beware of a potential correction
While this succession of green candles is appreciable, one must still remain cautious. The general trend in the cryptocurrency market remains bearish and there is no indication that we are out of the bear market. Even so, such a rise is usually accompanied by a bearish correction.
However, the cryptocurrency market is surprising and difficult to tame. This week, every bullish move has been punctuated by a small lateralisation of a few hours, prompting traders to go short (bet down) before the market goes back up.
As this data from Coinglass shows, the cryptocurrency market saw $721 million in liquidations in 24 hours, the most since November 8, 2022 and the announcement of the FTX bankruptcy:
Liquidations in the cryptocurrency market
We obviously don’t have a crystal ball, but it is very likely that Bitcoin will correct this strong bullish move. Furthermore, technical analysis shows us that the price is moving under many resistances. In short, caution is the order of the day.
