Bitcoin posts longest rally since July, volatility returns

Bitcoin posts longest rally since July, volatility returns

Bitcoin and its brethren appear to be recovering from the damage caused by the FTX collapse and subsequent contagions.

The asset hit an intraday and two-month high of $18,287 during the Asian trading session on Thursday morning. BTC has gained 10% in the last two weeks and is up 4.2% in the last 24 hours.

The world's largest digital asset has grown for eight straight days, the longest such streak since July, according to Bloomberg. Frank Cappelleri, the founder of CappThesis, commented:

“BTC needs to take advantage of this streak in a similar way if its long-term downtrend has a chance of being broken soon,”

Bitcoin breaks out of low volatility

As on-chain analytics firm Glassnode noted in its weekly report, Bitcoin has been in a period of historically low realized volatility. “Such periods have historically preceded explosive market movements, with past examples both halving asset valuations and sparking new bull markets,” it said.

The breakout appears to be happening at the moment, but it remains to be seen whether the momentum is sustainable. BTC has gained 10% since the beginning of the year and has been on the rise since December 30th.

#btc weekly MACD looks promising… pic.twitter.com/kBclzJ4rFK

— Dave the Wave🌊🐫 (@davthewave) January 11, 2023

Additionally, a weakening dollar provides a better trading environment for crypto. Tallbacken Capital Advisors founder Michael Purves commented that the near-term outlook is optimistic.

“Risk assets have rallied, in my opinion, because the bottom line is slowly but surely coming to the fore and positioning has been bearish and changing, implying bullish short-term price action.”

Institutions were expected to return to this asset class when the outlook becomes less bleak and confidence returns.

Elsewhere in crypto markets

The total market capitalization has reached $925 billion after a daily gain of 3.3%. Nearly $100 million has re-entered the space since the market cycle low on November 22nd. The next target is the $1 trillion mark, which would mean a recovery of all losses following the FTX collapse.

Ethereum has surpassed $1,400 for the first time in nine weeks after a daily rise of 5%. ETH has made an impressive 18% in the last two weeks, outperforming its big brother.

Most of the remaining crypto market is in the green, but a handful of coins are posting stronger gains. These include XRP up 6.5%, Litecoin (LTC) up 5.6%, Avalanche (AVAX) up 27% and Near Protocol (NEAR) up 11% on the day.

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