Bitcoin Surges to Highest Price Since August Amid Second Weekend Rally

Bitcoin Surged To Its Highest Levels In Months Ahead Of the Lunar New Year Holiday, Rallying For a Second Straight Weekend.

The cryptocurrency's price has been on the rise in recent weeks, and the holiday period is typically a time of increased activity in Asia. With more people celebrating and spending money during the Lunar New Year, demand for Bitcoin is likely to continue to rise.

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The largest cryptocurrency, Bitcoin, rose to $22,786 this week, its highest level since August. This comes after strong gains over the weekend and predictions that the cryptocurrency market has passed its lows. Ethereum, the second largest cryptocurrency, also rose 2.4% to levels not seen since September. The Lunar New Year holiday, also known as Chinese New Year, may also be contributing to the positive momentum in the market.

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According to Markus Thielen, head of research at Matrixport, buying Bitcoin at the end of the first day of Chinese New Year and selling it 10 trading days later has returned positive results on average over the last eight years (2015-2022). Thielen notes that the beginning of the Chinese New Year has been an attractive entry timing for long positions.

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Bitcoin and Ether have both surged in value by more than 35% to start 2023, amid a more promising macroeconomic outlook. US short-term inflation expectations have fallen to their lowest level in almost two years, providing a boost to consumer sentiment, according to the University of Michigan’s preliminary survey reading. The Federal Reserve is expected to downshift to smaller interest-rate increases following the further cooling in prices, though it is likely to keep hiking until pressures show more definitive signs of slowing.

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The Federal Reserve is set to slow down interest rate hikes again and debate how much further to go in order to keep the economy from slowing down. This comes as a result of the recent stock market volatility and concerns about the global economy.

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Even though some investors are bullish on the prospects for Bitcoin and Ethereum this year, others are expressing caution. Sean Farrell, head of digital asset strategy at Fundstrat, predicts that Bitcoin will rise to $35,000 to $44,000 this year, and that Ether will hit $2,400 to $3,200. However, he is still advising that there could be trouble in the markets with issues like turbulence at Digital Currency Group still looming large.

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Farrell wrote in a note Friday that while he believes the worst is over for the major cryptocurrencies, there are still some near-term risks to be aware of. These include additional fallout from the DCG hack, another sell-off at the next FOMC meeting, and the fact that despite the recent rally, we are still in an on-chain bear market.