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Bitcoin (BTC) has an important new price target for bulls to meet — and it is closer than it seems.

As noted by Philip Swift, co-founder of trading suite Decentrader, $25,000 is now a critical BTC price level.

Bitcoin price rally near "a lot of liquidity"

After putting in 40% gains in January, Bitcoin continues to consolidate around the $23,000.

Opinions are split as to what will happen next — after more than a year of bear market, plenty of market participants expect a dramatic correction and even new multi-year lows of $12,000 or worse.

Others believe that the good times can continue and even see BTC/USD reach $30,000 before checking its relief rally.

Bitcoin (BTC) rallied 11% between Jan. 20 and Jan. 21, reaching the $23,000 level and shattering bears' expectations for a pullback to $20,000. Even more notable is the move brought demand from Asia-based retail investors, according to data from a key stablecoin premium indicator.

Traders should note that the tech-heavy Nasdaq 100 index also gained 5.1% between Jan. 20 and Jan. 23, fueled by investors’ hope in China reopening for business after its COVID-19 lockdowns and weaker-than-expected economic data in the U.S. and the Eurozone.

Another bit of bullish information came on Jan. 20 after U.S. Federal Reserve Governor Christopher Waller reinforced the market expectation of a 25 basis point interest rate increase in February. A handful of heavyweight companies are expected to report their latest quarterly earnings this week to complete the puzzle, including Microsoft, IBM, Visa, Tesla and Mastercard.

In essence, the central bank is aiming for a “soft landing,“ or a controlled decline of the economy, with fewer job openings and less inflation. However, if companies struggle with their balance sheets due to the increased cost of capital, earnings tend to nosedive and ultimately layoffs will be much higher than anticipated.

On Jan. 23, on-chain analytics firm Glassnode pointed out that long-term Bitcoin investors held losing positions for over a year, so those are likely more resilient to future adverse price movements.

Bitcoin’s mining industry has been relatively stable compared to the bearish price action and the tumultuous fallout of exchanges and lending companies. 

The network’s hashrate dipped slightly toward the end of 2022, primarily due to an unprecedented blizzard in the U.S., and has since recovered strongly to surpass its previous peak above 270 EH/s. It was particularly encouraging to see that the hashrate holding well above summer 2022 lows, despite the aftermath of FTX collapse.

However, despite the recent robustness in a variety of metrics, the mining industry faces many challenges, which will likely restrict its growth moving forward. The hurdles include low profitability, a threat from new-age efficient machines and the upcoming Bitcoin halving which will slash block rewards by half.

BTC mining remains a stressed industry

While the hashrate of Bitcoin's network has improved, miners are still under a lot of stress due to low profitability. The earnings of Bitcoin miners have shrunk to one-third their value from the peak. Before the May 2022 price collapse, miners made more than $0.22 daily per TH/s, a figure which has now dropped to $0.07.

The percentage share of small-sized miners with breakeven prices above $25,000 has dropped from 80% in 2019 to 2% by 2022, which is a positive sign of an end to miner capitulation.

Axie Infinity (AXS) has rallied 135% month-to-date to reach approximately $14 on Jan. 23, its highest level in two months. Nonetheless, the AXS/USD pair could suffer major losses in the coming weeks owing to a flurry of negative technical and fundamental indicators.

Axie Infinity price prints "gravestone" doji

The AXS price formed a "gravestone doji" candlestick on Jan. 23, which technical analysts view as a bearish reversal pattern.

A gravestone doji appears when an asset's opening, closing, and the lowest price comes to be nearly identical except for the highest price, as shown in the chart below. The long upper wick shows that the bears pared all of the gains printed by the candle during the given session.

AXS seems to have been forming a similar candlestick pattern as of Jan. 23, with bears rejecting its advance above the $14 price level, triggering a 10%-plus intraday price drop.

In addition, the rejection came as the AXS/USD pair's relative strength index (RSI) crossed into overbought territory, coinciding with its price testi the 200-day exponential moving average (200-day EMA; the blue wave in the chart above), which has served as resistance in January 2022 and April 2022.

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.

Bitcoin (BTC) rose toward new multi-month highs on Jan. 20 as analysis predicted a new trading range above $18,000.

Bitcoin price range "well defined"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD testing but preserving support at $21,000.

The pair edged higher at the Wall Street open, in line with United States equities as the third trading week of an explosive January drew to an end.

Despite misgivings over the rally’s fundamental strength, Bitcoin continued to avoid significant corrections, with exchange order book analysis revealing $23,000 as the next big resistance zone to crack.

“I view the lack of BTC liquidity below $18k and above $23k as a lack of sentiment for those levels at this time,” on-chain monitoring resource Material Indicators wrote in part of commentary about the Binance order book setup.

The total crypto market capitalization soared by 29.4% in two weeks, although Bitcoin's (BTC) price stabilized near $21,000 on Jan. 19.

As a result, it became increasingly difficult to justify that the 5-month-long bearish trend still prevails after the $930 billion total crypto channel top has been breached. Still, the psychological $1 trillion resistance remains strong.

The move possibly reflects investors becoming more optimistic about risk assets after weaker than expected inflation metrics signaled that United States Federal Reserve interest rate hikes strategy should ease throughout 2023.

However, Klaas Knot, who serves as the governor of the Dutch central bank, stated on Jan. 19 that the European Central Bank (ECB) "will not stop after a single 50 basis point hike, that's for sure."

At the Davos forum Knot added: "core inflation has not yet turned the corner in the Euro area."

Avalanche (AVAX) came into the spotlight early at the beginning of 2023 by adding its blockchain support to Amazon Web Services (AWS) cloud. However, empirical and on-chain analysis suggests that Avalanche’s price surge is likely due to a broader cryptocurrency market pump which will likely end with the rest of the market.

Is Avalanche’s Amazon news exaggerated?

While integration with the world’s largest blockchain service is a positive step for Avalanche, the hype around its implications might be exaggerated. The evidence lies in a similar move that Avalanche’s team made in December 2022.

Avalanche’s team established a deal with Alibaba’s Cloud toward the end of 2022. The Asia-based cloud service commands a 6% share of the sector globally. Nevertheless, the blockchain’s validator count has remained consistent, implying that not many users of Alibaba Cloud are willing to run an Avalanche node.

AWS earns revenue from users willing to use blockchain nodes, which is probably why it keeps adding support for various blockchains. Amazon has supported an Ethereum node since May 2021. The recent Amazon partnership announcement might mislead some investors.

Avalanche’s ecosystem development

Avalanche’s blockchain usage data is also not encouraging. The gas used on the blockchain subsided steeply after the May 2021 crypto market crash and it hasn’t recovered since. The total value locked in Avalanche’s DeFi ecosystem is near two-year lows of $885 million, ranking sixth in comparative liquidity of other chains.

Bitcoin (BTC) price has held above $20,700 for 4 days, fueling bulls' hope for another leg up to $23,000 or even $25,000. Behind the optimistic move was a decline in inflationary pressure, confirmed by the December 2022 wholesale prices for goods on Jan. 18. 

The United States producer price index, which measures final demand prices across hundreds of categories also declined 0.5% versus the previous month.

Eurozone inflation also came in at 9.2% year-on-year in December 2022, marking the second consecutive decline from October's 10.7% record high. A milder-than-expected winter reduced the risk of a gas shortages and softened energy prices, boosting analysts' hope of a "soft landing." According to analysts, a soft landing would avoid a deep recession and possibly convince central banks to curb their interest rate hikes.

This week's Jan. 20, $580 million BTC options expiry looks like an easy win for bulls because the surprise 7-day 23% rally above $21,000 caused most bearish bets to become worthless. The recent move has holders (or hodlers) calling a market bottom and the potential end to the bear market, but the options market might hold the answer.

Can Bitcoin options help bulls secure the $20,000 floor?

It might seem like distant reality right now, but Bitcoin was trading below $17,500 just 7 days ago. As the weekly options expiry on Jan. 20 approaches, the bullish bets are about to pay off, while bears will see their options becoming worthless as the deadline looms over them.

In his latest blog post released on Jan. 19, Arthur Hayes, the former CEO of BitMEX exchange predicted a “global financial meltdown” thanks to future United States economic woes.

Hayes: Crypto will "get smoked" in Fed pivot

Bitcoin’s current rally should likely not be taken as the start of a new bull run.

That is the opinion of Arthur Hayes, who in a fresh treatise on U.S. macroeconomic policy this week warned that current Federal Reserve behavior would flip from restrictive to liberal, but cause cryptoassets to “get smoked.”

With U.S. inflation easing, the Fed is the focus of practically every crypto analyst this year as they estimate the likelihood of a policy “pivot” away from quantitative tightening (QT) and interest rate hikes to flat and then decreasing rates, and potentially even quantitative easing (QE).

This essentially involves a move away from draining the economy of liquidity to injecting it back in, and while that practice led to new all-time highs for Bitcoin beginning in 2020, the same phenomenon would not be plain sailing next time around, Hayes believes.

Bitcoin (BTC) may gain another 50% before seeing a mass sell-off to complete its bear market, new research predicts.

In the latest edition of its regular markets newsletter, “The Crypto Circular,” trading firm QCP Capital delivered a grim warning to those who believe that crypto winter is over.

Research warns of "final Wave 5 selloff"

Bitcoin has surprised by retaining new support levels abruptly reclaimed in its week-long bull run, so far topping out at $21,650.

Despite widespread suspicion over the “choreographed” move, BTC/USD has nonetheless clawed back key trend lines and psychological price points.

For QCP, there is still plenty of fuel to send the pair higher, but that still does not mean that the bear market overall is done and dusted.