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After Bitcoin (BTC) hit a yearly high of $21,095 on Jan. 13, where is it headed next?

Bitcoin is currently witnessing an uptick in bullish momentum after the positively perceived Consumer Price Index (CPI) report was followed by a strong rally across the crypto market. 

The recent rally in Bitcoin is creating increased volume levels and higher social engagement on whether the price is in a breakout of fakeout mode.

Is the Bitcoin bear market over?

While the market is still technically in a bear market compared to last week, investor sentiment is improving. According to the Fear and Greed Index, a crypto-specific metric that measures sentiment using five weighted sources, investors’ feelings about the market hit a monthly high.

Bitcoin price is now above the psychologically important $21,000 level and many analysts and traders are issuing their thoughts on where BTC price could head next.

Bitcoin (BTC) stayed near $19,000 at the Jan. 13 Wall Street open as traders hoped a week of swift gains would stick.

BTC price “breakout or fakeout remains to be seen”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD crisscrossing the $19,000 mark as United States equities began trading.

The pair rapidly took out sell-side liquidity overnight, gapping higher to what on-chain analytics resource Material Indicators forecast could be a retest of the $20,000 mark.

“Seems like BTC is setting up for a retest of resistance at the 2017 Top,” it wrote in part of a Twitter discussion on Jan. 12, the day prior.

“Whether we see a bonafide breakout or fakeout remains to be seen. Time for patience and discipline.”

Ether (ETH) price technicals suggest that 35% gains are in play by March 2022 due to several bullish technical and fundamental factors.

Ethereum price rises above two key moving averages

On Jan. 8, Ether's price crossed above its 21-week exponential moving average (21-week EMA; the purple wave) and 200-day simple moving average (200-day SMA; the orange wave).

Historically, these two moving averages have separated bull and bear markets. When ETH price trades above them, it is considered to be in a bull market, and vice versa.

The last time when Ether crossed above its 21-week EMA and 200-day SMA was in April 2022. But this was a fakeout, in part due to the collapse of Terra (LUNA) the following month.

But while Ether's MA crossover does not guarantee further gains, the upside potential becomes greater if one looks at it in conjugation with other bullish factors, described below.

Bitcoin (BTC) may be up 16% in 2023, but one stock it outperformed last year is now getting its revenge.

Data from Cointelegraph Markets Pro and TradingView shows that for all its newfound strength, Bitcoin is still playing catch-up.

Tesla up almost 25% from January low

Tesla was in the headlines throughout 2022 as its rapid rise to prominence — and stock price gains — steadily unwound.

Despite CEO Elon Musk making history with his personal wealth losses, Tesla (TSLA) has so far recovered by almost 25% since Jan. 6.

Amid an atmosphere of declining inflation in the United States and a surge in the price of safe-haven gold, the stage is arguably set for a broader risk asset rebound.

Bitcoin (BTC) price has gained 15% in the past 13 days, and during this timeframe, traders’ bearish bets in BTC futures were liquidated in excess of $530 million compared to bulls.

After rallying to $19,000 on Jan. 12, Bitcoin reached its highest price since the FTX exchange collapse on Nov. 8. The move was largely fueled by the United States Consumer Price Index (CPI) expectation for December, which matched consensus at 6.5% year-over-year — highlighting that the inflationary pressure likely peaked at 9% in June.

Furthermore, on Jan. 11, FTX attorney Andy Dietderich said $5 billion in cash and liquid cryptocurrencies had been recovered — fueling hopes of partial return of customer funds in the future. Speaking to a U.S. bankruptcy judge in Delaware on Jan. 11, Dietderich stated that the company plans to sell $4.6 billion of non-strategic investments.

Let’s look at derivatives metrics to understand whether professional traders are excited about Bitcoin’s rally to $19,000.

Margin use increased as Bitcoin price rallied to $18,300 and above

Margin markets provide insight into how professional traders are positioned, and margin is beneficial to some investors because it allows them to borrow cryptocurrency to leverage their positions.

Bitcoin (BTC) wobbled at $18,000 at the Jan. 12 Wall Street open despite United States inflation continuing to fall.

Bitcoin traders stay wary post-CPI

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD encountering predictable volatility around the release of Consumer Price Index (CPI) data for December.

The first such release of 2023, the event preceded the start of trading on Wall Street, with Bitcoin briefly gapping higher before returning to threaten a breakdown below the $18,000 mark.

In so doing, the largest cryptocurrency copied behavior from one month prior, with resistance at $18,500 remaining untested.

CPI came in at 6.5% year-on-year, in line with the majority of predictions. According to CME Group’s FedWatch Tool, markets were correspondingly betting on a smaller 0.25% interest rate hike from the Federal Reserve at the February meeting of its Federal Open Market Committee (FOMC).

Avalanche (AVAX) has opened 2023 with a bang, rising nearly 55% in the first two weeks. And now, a mix of technical and fundamental indicators hints that the token will keep rallying into March.

AVAX price breakout underway

The AVAX/USD pair appears to have been forming a falling wedge pattern since May 2022 and has now entered the breakout stage of this pattern.

A falling wedge forms when the price trends lower inside a range defined by two converging, descending trendlines. The pattern resolves as the price breaks out of its range to the upside. As a rule of technical analysis, the price can rise as high as the distance between its upper and lower trendlines.

Applying the theory on AVAX's falling wedge pattern brings the token's breakout target at around $34, a 115% increase from current price levels.

Avalanche's Amazon partnership

AVAX’s bullish setup appears as Ava Labs — the developer of the Avalanche network — becomes an official blockchain solution provider to Amazon Web Services (AWS).

Bitcoin (BTC) hodlers are returning to profit as new data hints the BTC price has put in the “foundation” of a macro bottom.

The latest figures from on-chain analytics firm Glassnode shows a large swathe of the BTC supply heading “into the black” as BTC/USD passed $18,000.

Bitcoin establishes "massive" accumulation zone

After gaining nearly 5% in 24 hours, Bitcoin is back on bulls’ radar ahead of a crunch United States inflation data release.

What the impact will be remains uncertain, but on-chain analysis is eyeing a more important phenomenon already playing out on the market.

The latest price uptick has seen a considerable number of bitcoins flip from unrealized loss to unrealized profit — it is now worth more than when it last moved.

Bitcoin (BTC) price jumped to $17,500 on Jan. 11, driving it to its highest level in three weeks. The price move gave bulls control of the $275 million BTC weekly options expiry on Jan. 13 because bears had placed bets at $16,500 and lower. 

The recent move has perma-bulls and dip buyers calling a market bottom and potential end to the bear market but what does the data actually show?

Is the Bitcoin bear market over?

It might seem too pessimistic to say right now, but Bitcoin did trade below the $16,500 level on Dec. 30 and those bearish bets are unlikely to pay off as the options deadline approaches.

Investors' main hope is the possibility of the U.S. Federal Reserve halting its interest rate increase in the first quarter of 2023. The Consumer Price Index (CPI) inflation report will be released on Jan. 12 and it might give a hint on whether the central bank’s effort to slow the economy and bring down inflation is achieving its expected results.

Meanwhile, crypto traders fear that an eventual downturn in the traditional markets could cause Bitcoin to retest the $15,500 low. For instance, Morgan Stanley's CIO and chief U.S. equity strategist, Mike Wilson, told investors on CNBC to brace for a winter downdraft and warned that the S&P 500 index is vulnerable to a 23% drop to 3,000. Wilson added: "Even though a majority of institutional clients think we're probably going to be in a recession, they don't seem to be afraid of it. That's just a big disconnect."

The price of Ethereum’s native cryptocurrency, Ether (ETH), gained 10.2% from Jan. 4 to Jan. 10, breaching the $1,300 resistance without much effort. But has the Ether price move cast a light on whether the altcoin is ready to begin a new uptrend?

Will Ether’s former resistance level turn to support?

After testing the $1,200 support on Jan. 1, the eight-week ascending channel has displayed strength, but Ether bulls fear that negative newsflow might break the pattern to the downside.

Despite the positive price trend, the sentiment around Ether and other cryptocurrencies hasn’t been very enticing. For example, Xiao Yi, the former Chinese Communist Party secretary of Fuzhou, confessed on Jan. 8 to “acting recklessly” in support of crypto mining. Xiao spoke from what appeared to be a prison, apologizing for causing “grave losses” to the Fuzhou region.

On Jan. 10, South Korean tax agents reportedly raided crypto exchange Bithumb’s offices to explore a potential tax evasion case. On Dec. 30, Park Mo — an executive at Bithumb’s parent company — was found dead, though he was under investigation for embezzlement and stock price manipulation.

Also on Jan. 10, Cameron Winklevoss, co-founder of the Gemini exchange, issued an open letter to Barry Silbert, CEO of Digital Currency Group. In the letter, Winklevoss makes some serious fraud accusations and requests that the Grayscale fund management holding company dismiss Silbert to provide a resolution for Gemini’s Earn users.

Bitcoin (BTC) is facing a “bottoming candle” in 2023, but BTC price action is still more than able to surprise the market.

In a tweet on Jan. 11, popular trader and analyst Rekt Capital predicted that BTC/USD could see “decent upside” this year.

Chart teases serious Bitcoin upside potential

Analyzing Bitcoin’s four-year market cycles around block subsidy halving events, Rekt Capital drew attention to 2023 being the deadline for its next “bottoming candle.”

With the next halving due in 2024, the coming 12 months should see a price floor, followed by a rally as the event draws nearer.

2024 thus forms the fourth candle in Bitcoin’s current cycle, and 2023 the third.

The price of Solana’s SOL (SOL) cryptocurrency is up an impressive 60% since the new year, partially boosted by hype surrounding meme cryptocurrency Bonk. However, the SOL/USD pair now shows signs of exhaustion, raising anticipation that the token may see a short-term correction in the coming days.

SOL turns overbought

SOL has been one of the best-performing cryptocurrencies so far in 2023, after being one of the biggest losers in 2022. 

On Jan. 9, SOL’s price jumped to as high as $19.50, or gains of around 120%, in a recovery rally after sliding below $8 on Dec. 29, 2022.

But the price spike also turned SOL into an overbought asset, per its daily relative strength index (RSI) reading above 70, as shown below.

Traditional investors typically see an overbought RSI as a potential sell signal, given that the indicator has historically coincided with a period of buyer exhaustion. As a result, SOL’s price could enter a correction or a sideways consolidation stage to bring its RSI back below 70.

Bitcoin (BTC) staged a brief but promising return to $17,500 overnight on Jan. 11 as newfound strength lingered.

Bitcoin fails to win over skeptical traders

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting new local highs of $17,504 on Bitstamp.

Almost tying with the peak from Dec. 16, the pair displayed rare upside momentum against a backdrop of some of the lowest volatility ever seen over the holiday season.

Traders and analysts anticipate an erratic reaction to upcoming macroeconomic data from the United States. Due on Jan. 12, the Consumer Price Index (CPI) print is expected to bolster the narrative that inflation is waning, offering a potential window of opportunity for risk assets.

Nonetheless, many voices urged caution, with signs of fundamental price support still lacking.

While 2022 ended on a grim note with macro headwinds providing little hope of a revival in 2023, the start of a new year has surprised bears with a surge in Bitcoin (BTC), Ether (ETH) and altcoin prices. The period of sparse volatility in the crypto market appears to be ending with a breakout on the upside.

The increase has been particularly striking in some altcoins such as Lido (LIDO), Solana (SOL), and Cardano (ADA). The primary factors promoting the spike in these coins are the upcoming Ethereum Shanghai update (for LIDO) and the negative funding rate in the futures market, especially for SOL. The negative rates implies that most traders are holding short positions, giving an opportunity for whale buyers to run their stop losses. Funding rates for some other tokens remain exposed to a short squeeze.

Moreover, the new year has also seen the re-emergence of the degen gambling that had taken a back seat after the FTX collapse in November 2022. A meme coin price surge is evidence of the residual degen spirit. Technically, the total market capitalization of altcoins has surpassed a key technical resistance level as bullish momentum builds.

While the sustainability of the bull run is questionable due to the broader trend remaining bearish, the fledgling uptrend could still bring some pain for late sellers. The five primary factors influencing altcoin prices are:

Job market data revives the hope of a soft landing

Defying the Dow’s estimate for 200,000 nonfarm payrolls and market expectations of a slowdown, labor market data from December 2022 showed a 230,000 or 0.2% increase in employment.

Bitcoin (BTC) traders faced disappointment at the Jan. 10 Wall Street open after the United States Federal Reserve declined to comment on future policy.

Powell keeps quiet on Fed policy

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it stayed flat at around $17,250 on Bitstamp.

Hopes had focused on a fresh BTC price catalyst courtesy of the Fed in the form of a speech by Chair Jerome Powell.

Speaking at the International Symposium on Central Bank Independence at Sweden’s Central Bank headquarters in Stockholm, however, Powell avoided the topic of U.S. monetary policy altogether.

“I will address three main points. First, the Federal Reserve's monetary policy independence is an important and broadly supported institutional arrangement that has served the American public well,” he began.

Bitcoin (BTC) stayed above $17,000 on Jan. 10 as risk assets awaited fresh cues on policy from the United States Federal Reserve.

Powell to kick off week of U.S. macro triggers

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD consolidating after hitting $17,396 on Bitstamp the day prior — its highest since Dec. 16.

The pair gained in line with gold early in the week, seeing a slight cool-off as U.S. stocks also lay in wait for potential Fed catalysts.

Fed Chair Jerome Powell was due to speak at a central bank conference on the day, with bulls hoping for a more dovish tone in the wake of several months of declining inflation.

The latest Consumer Price Index (CPI) data covering December, 2022, was nonetheless not due until Jan. 12.