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Bitcoin and Ethereum are Soaring – Why?

Why is the crypto market pumping 🧵 BTC cryptocurrency NEAR all you need to know @ShitzuCommunity

January 14th, Bitcoin crossed the 20,000 price mark for the first time since the downfall of FTX around two months ago. In the last week alone, it has increased its price by 20%!

But Bitcoin isn’t the only one rallying.

Ethereum is up almost 14% over the last five days

Solana a mind-boggling 68% (thanks to the useless cryptocurrency Bonk)

Avalanche an amazing 42%

Since January 1st, the total Crypto market has rallied 21%, from 756 billion to around 916 billion at the time of writing. Have all the Crypto market participants suddenly introduced ground-breaking technological advancements to explain this increase?

NO

The reasons are more about pathological gambling and misjudged decisions and less about logic.

Because logic was long lost when it comes to the emotion-driven financial markets.

Cryptocurrencies, to this day, are still very correlated to stocks. Thus, as stocks rallied, so did Cryptos. But why are stocks around the world rallying? First, let’s cover the “official” reason:

The Consumer Price Index for All Urban Consumers was released, painting a picture of declining inflation in the US of 0.1%, leaving it at a still extremely high value of 6.5%

This result gives hope that the Federal Reserve’s rate hikes won’t be as big as the ones we’ve been suffering for months now. The markets are going up in hopes that recent “good” news picture a much less painful future for the economy in 2023.

in my humble opinion markets aren’t pricing in many of the negative prospects the markets are setting for 2023. For the sake of my long-term investments, I hope I’m wrong, but neither you nor I know what will happen. Peace

This post is based on this twitter thread.

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