Over $70 billion injected into Bitcoin this week; More purchasing power to come?

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Bitcoin (BTC) kicked off 2023 with an explosion hitting several key support levels that investors hope can build the foundation for the premier cryptocurrency to rally further. The bullish momentum came with investors capitalizing on the positive macro news to pump more capital into the asset.

Along this line, Bitcoin saw an inflow of over $73 billion in seven days amid sustained buying pressure. At the time of publication on January 15, Bitcoin controlled a market capitalization of $399.1 billion, an increase of approximately 22% from the $326.1 billion recorded on January 8.

Seven-day Bitcoin market capitalization chart. Source: CoinMarketCap

Indeed, Bitcoin’s value is benefiting from increased capital inflows, with the asset trading at $20.886, having risen more than 22% in seven days. On the weekly chart, BTC peaked above $21,000 on January 14. Notably, Bitcoin’s momentum has resulted in one of the longest winning streaks for the asset in nearly two years.

Seven-day Bitcoin price chart. Source: FinboldCPI data triggers an influx of Bitcoin capital

Sustained Bitcoin inflows highlight the revival of crypto markets after the last US Consumer Price Index (CPI) for December came in at 6.5% on an annual basis.

The report was interpreted as a sign that the Federal Reserve is winning the battle to slow inflation. This factor translates into the possibility that risky assets like Bitcoin will not face further effects from strong monetary policy tightening pressure.

With Bitcoin recently seeing bullish momentum and reversing the general effects of the FTX crash, investors are still wondering where the price of the asset might be heading next. Indeed, the main concern is whether the bear market is over or not.

Can Bitcoin maintain its recent gains?

Investors should still exercise caution, as Bitcoin still faces bearish sentiment that could reverse current gains. For example, cryptocurrency entities have yet to recover from the effects of the macroeconomic environment, announcing a series of layoffs alongside the possibility of the United States forming a House subcommittee on cryptocurrency. currencies.

Additionally, based on the overall market mood tracked by the Fear and Greed Index, the crypto sector appears to be heading towards optimism. The index lines up with “neutral” sentiment just a day after languishing in the “fear” zone.

Crypto fear and greed index. Source: Alternative.me

Meanwhile, crypto trading expert and analyst Michal van de Poppe pointed out that Bitcoin still faces key events that could impact the current rally. In a YouTube video posted Jan. 13, he said investors should look for data that affects general economic health, such as retail sales.

He further warned that despite slowing inflation data, the Fed may still raise rates if overall economic health is weak, something that could affect purchasing power.

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

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