Bitcoin's Unexpected Bullish Week

The world's largest cryptocurrency at one point increased by nearly $2,000 a unit in just one day this past week, reaching its highest peak since mid-June 2022.

Earlier this week, Bitcoin was just under $22,000 a coin, according to the market price set from the previous weekend. However, starting on February 15, the world's largest cryptocurrency kicked off several rallies.

On February 16, the Bitcoin market increased steeply from nearly $22,800 to $25,062 per coin in less than 24 hours. The above market price is the highest in the past 7 months.

Crypto-related stocks have also rallied recently. Exchange giant Coinbase and trading software provider MicroStrategy – a company that holds a lot of Bitcoin – are up 3% and 2% respectively.

Shares of Bitcoin miner Marathon Digital Holdings rose more than 4%. This is a group that reverses the trend when red is covering most of the stock market. Last week, the Dow Jones dropped 0.13%, marking the third consecutive week of decline. The S&P 500 fell 0.28%, its second straight weekly loss.

In just one week, Bitcoin increased in price by 13% - a rare number during the "winter" period of the digital currency. CoinDesk likens the past 7 days to the coin's "crazy week". The main factor affecting the market price is the optimism of investors before the macro developments.

During the week, the US announced the consumer price index (CPI) in January increased by 0.5%, higher than the level of 0.1% a month earlier. Inflation is higher but this level is still in line with economists' forecasts and has slowed over the past few months.

At the same time, the US Securities and Exchange Commission (SEC) also called on the US Congress to expand its authority to supervise and regulate cryptocurrency trading and lending platforms. The purpose of this agency is to protect investors.

Facing these two macro fluctuations, investor sentiment is still very optimistic. Basically, the above data are all positive.

Good market sentiment has sent Bitcoin, Ether and most other cryptocurrencies soaring. Riyad Carey, research analyst at data firm Kaiko, said Bitcoin's rally has "a little bit of excitement as regulatory issues have temporarily subsided".

Darius Tabatabai, co-founder of Vertex Protocol, a UK-based decentralized exchange, thinks that "there could be signs of a new bull market". The positive performance of cryptocurrencies coincides with above-average trading volume - one of the typical signs of a bull market.

Overall, investors are still very optimistic about the future of cryptocurrencies. They think the US Federal Reserve (Fed) will approve a second consecutive 25 basis point interest rate hike at the next meeting of the Federal Open Market Committee (FOMC) in March instead of turning around.

return to stronger growth like in 2022. Many expect that any economic slowdown will be mild, a scenario central banks are looking for.

Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock, said: “The forecasts for higher interest rates will affect the value of future cash flows, but increasing global liquidity is helping. push the price of digital assets". Meanwhile, Edward Moya, senior market analyst at foreign exchange exchange Oanda, thinks Bitcoin's resilience is quite impressive. But this expert remains cautious. According to him, the cryptocurrency market has to "live week by week" and right now the main goal is to put in place measures to protect investors.

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