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Bitcoin price rally follows the growing cheer on Wall Street amid the cooling down of inflation and the expected softening stand by the Fed ahead.
Bitcoin and the broader cryptocurrency market registered a fresh rally on Wednesday, January 11. The world’s largest cryptocurrency gained over 4.5% in a single day moving past $18,200 levels.
New Bitcoin Rally
It is for the ninth straight day that the Bitcoin (BTC) price has ended in the green. This also marks the largest winning streak for Bitcoin since the pandemic days of 2020, reported Bloomberg.
The recent price rally in Bitcoin and the broader crypto market comes following the optimism on Wall Street. Top three US indices gained by 1% on Wednesday on easing global macro cues. The cooling down of the inflation shows that going ahead the Fed might relax the speed of its interest-rate hikes.
As a result, risk-ON assets including equity and crypto are once again doing well. Since the beginning of 2023, Bitcoin and other altcoins have delivered pleasant gains after a strong bear market in 2022. Speaking to Bloomberg, Michael Purves, founder of Tallbacken Capital Advisors said:
“Risk assets have been rallying, I think, for the reason that the terminal rate is coming slowly but surely into the foreground and positioning has been bearish and transitioning, which means bullish near-term price action”.
In its weekly report on January 9, on-chain data provider Glassnode also hinted at a price pump coming soon. They noted that Bitcoin has been in a period of low realized volatility. “Such periods have historically preceded explosive market moves, with past examples both cutting asset valuations in half and triggering new bull markets,” it stated.
$200 Million Worth of Short Liquidations
As Bitcoin and other cryptocurrencies rallied on Wednesday, the crypto market witnessed more than $200 million in short liquidations. Crypto exchange OKX saw the largest volume of short liquidations over the last 24 hours, as per Coinglass.
The recent price move in Bitcoin has given Bitcoin bulls control over the $275 million BTC weekly options expiry on Jan. 13. this is because the bears had placed a bet at $16,500 and below. This means that Bitcoin bears need to push the BTC price below $16,500 by Friday in order to secure a bet of $40 million. On the other hand, if bulls manage to hold the BTC price above $17,500, they can take home a profit of $75 million.
On the other hand, institutional activity in Bitcoin will likely take more time to resume. Noelle Acheson, author of the “Crypto Is Macro Now” newsletter said that “there is little doubt that large players will come back into the market when the outlook is less murky, pushing up transactions and also price”.