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Cathie Wood's Ark Invest offloaded a chunk of its Grayscale Bitcoin Trust (GBTC) shares since November's Bitcoin (BTC) price lows, the latest data shows.

Cathie Wood's Ark short-term cautious on GBTC

Ark Invest added 450,272 GBTC shares worth $4.5 million to its ARK Next Generation Internet ETF (ARKW) in November 2022. At the time, GBTC was trading in the $7.46-$9.48 range versus $12.25 in January 2023.

GBTC price, of course, recovered alongside Bitcoin, rising roughly 40% from its November lows. The recovery in January also helped reduce the GBTC "discount" from nearly 50% to 40%, according to YCharts.

Interestingly, the share price rebound coincided with a reduction in ARKW's GBTC holdings by 500,000 shares, suggesting profit taking in the short term.

Moreover, Ark's reduction in shares since November appears in line with its officially "bearish view" on the Grayscale Bitcoin Trust, as mentioned in its December report, which stated that:

Bitcoin (BTC) starts the last week of January in fine form after sealing its highest weekly close in five months. 

Despite opposition, the largest cryptocurrency is holding on to its newfound strength and continues to surprise market participants.

This is no mean feat — market sentiment has plenty to spook it and initiate a rethink among investors. Macro conditions remain uncertain, while within Bitcoin, research has highlighted whales on exchanges potentially moving prices artificially with huge amounts of liquidity.

Nonetheless, Bitcoin has seen its most impressive gains percentage-wise in over a year, and hopes remain that the good times will endure. What could that depend on?

Cointelegraph takes a look at some of the major factors to keep in mind as a January unlike any other draws to a close.

This week Bitcoin (BTC) rallied to a 2023 high at $23,100 and the move followed a notable recovery in traditional markets, especially the tech-heavy Nasdaq Composite Index, which gained 2.9% on Jan. 20.

Economic data continues to boost investors' hope that the United States Federal Reserve will reduce the pace and length of interest rate hikes. For instance, sales of previously owned homes fell 1.5% in December, the 11th consecutive decline after high mortgage rates in the United States severely impacted demand.

On Jan. 20, Google announced that 12,000 workers were laid off, more than 6% of its global workforce. The bad news continues to trigger buying activity on risk assets, but Dubravko Lakos-Bujas, chief U.S. equity strategist at JPMorgan, expects weaker earnings guidance to "put downward pressure" on the stock market.

The fear of recession increased on Jan. 20 after Federal Reserve Governor Christopher Waller said that a soft recession should be tolerated if it meant bringing inflation down.

Some analysts have pegged Bitcoin's gains to Digital Currency Group filing for Chapter 11 bankruptcy protection — allowing the troubled Genesis Capital to seek the reorganization of debts and its business activities. But, more importantly, the move decreases the risk of a fire sale on Grayscale Investments assets, including the $13.3 billion trust fund Grayscale GBTC.

After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.

The strong recovery in Bitcoin has startled several analysts who remain skeptical about the rally. Some believe that the current rise is a dead cat bounce that will reverse direction sharply, while others see similarities between the current rally and the 2018 bear market recovery.

Although traders should be ready for any eventuality, the pace of the rise in Bitcoin does point to a possible major bottom. There are likely to be bumps down the road but the dips are likely to be aggressively purchased by traders.

Bitcoin’s sustained recovery may encourage buying in select altcoins.

Let’s study the charts of Bitcoin and select altcoins that are showing strength in the near term.

Bitcoin (BTC) is in for a new “big rally” as market strength copies conditions from after the 2018 bear market.

According to the latest analysis, BTC/USD will continue to head higher “after some consolidation” thanks to key signals from its relative strength index (RSI).

Bitcoin prints never-before-seen bullish divergence

With the BTC price gains still coming, Bitcoin bulls are feeling increasingly confident despite widespread mistrust of the longevity of the current rally.

For popular trader Crypto Wolf, a key phenomenon now underway sets Bitcoin’s latest recovery apart from all others.

RSI, he noted on Jan. 18, had printed a long-awaited bullish divergence on weekly timeframes — something which has never happened before.

Bitcoin (BTC) took a swing at $23,000 into Jan. 21 as Asia buyers drove fresh market strength.

Bid liquidity causes suspicion

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD battling bears to reach $22,790 on Bitstamp overnight — its highest since August.

With new multi-month peaks coming in quick succession despite fears of a major correction, Bitcoin continued to surprise as traders cleared the way for more upside.

As noted by intraday trader Skew, Asia was leading the way into the weekend, with sellside pressure from market makers being absorbed on exchanges.

“Another rally driven by asia bid. TWAP buyers absorbing the sell pressure from MMs. Large spot bid lifting offers & ask wall pulled prior to another short squeeze,” Skew commented on a composite chart.

Bitcoin mining powers network transactions and BTC price. During the 2021 bull run, some mining operations raised funds against their Bitcoin ASICs and BTC reserves.

Miners also preordered ASICs at a hefty premium and some raised funds by conducting IPOs. 

As the crypto market turned bearish and liquidity seized within the sector, miners found themselves in a bad situation and those who were unable to meet their debt obligations were forced to sell the BTC reserves near the market bottom or declare bankruptcy

Notable Bitcoin mining bankruptcies in 2022 came from Core Scientific, filing for bankruptcy, but BTC’s early 2023 performance is beginning to suggest that the largest portion of capitulation has passed.

Despite the strength of the current bear market, a few miners were able to increase production throughout 2022 and on-chain data shows Bitcoin miner accumulation began to increase in December 2022 and momentum appears to be continuing into 2023.