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Bitcoin Begins 2023 With A Bullish Run As Price Crosses $20K

On January 13th, Bitcoin reached a three-month high as the price touched $19,104. Recently, the Fed announced December’s Consumer Price Index (CPI) as 6.5%. This affected the crypto market and pushed Bitcoin’s price below $17,900.

Fortunately, the bulls took over the market and created the largest daily candle recorded in six months. Still, experts have used some data points to assess if this is an actual bull run or a trap.

Crypto Community Awaits Fed’s CPI Announcement In February 

On February 1st, the Fed will hold its next FOMC meeting, where it will reveal the CPI data for January. The FEDWatch tool shows that experts’ predictions are majorly bullish.


95% of experts believe the Fed will reduce its rate increase and add only 25 bps. Additionally, a CNBC journalist, Carl Quintanilla, highlighted an analysis by Fundstrat Global Advisors, which said:

“59% of the factors of the CPI are now experiencing deflation, an increase of 800 basis points in one month. The bond market correctly predicted this trend, as inflation is currently lower than the Federal Reserve predicted.”

Furthermore, the Fundstrat report referred to the Atlanta Fed wage tracker. According to Fundstrat, the year-over-year reading for December fell to 5.5%, the lowest since January last year.

This data confirms that wage inflation has significantly slowed in recent months. Also, the firm believes that investors will continue to believe the Fed has successfully achieved its inflation goals.

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This sets the stage for 2023 to be different from 2022, where inflation expectations decrease faster than earnings per share risk. Nick Timiraos, the WSJ’s chief economics correspondent and a speaker for the Federal Reserve, tweeted that December’s CPI would keep the Fed on track to decrease the rate hike to one-fourth of a percentage point.

Timiraos also mentioned the statement of James Bullard, St. Louis Fed’s President. Bullard said:

“While it would be beneficial to reach the maximum rate soon, the specific timing of this action is not crucial in macroeconomic terms.” Meanwhile, Bitcoin investors can continue to monitor additional data points.

The Relationship Between The DXY And Bitcoin 

The U.S. Dollar Index (DXY) is a significant indicator for assessing Bitcoin’s price movements. According to analysts, both parameters have an inverse relationship.

As the DXY increases, BTC tends to decrease, and when the DXY decreases, BTC tends to increase. This scenario played out yesterday as Bitcoin continued rising while DXY fell.

The DXY is currently in a critical support zone. However, it is uncertain if risky assets such as BTC will encounter a bull trap or if the DXY will drop below 101 on the weekly chart and turn current support levels into resistance. If the latter occurs, BTC will likely increase in value.

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Meanwhile, Altana Digital Currency Fund’s CIO, Alistair Milne, in a post, highlighted a significant data point on BTC’s weekly chat. He said, “the price of Bitcoin is deviating significantly from its increasing relative strength. Before the weekly RSI reached an oversold state, it was a strong indicator of a large price movement. This signals the end of a bear market.”

Milne added that this pattern occurred in October/November 2015 and March/April 2019.

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Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

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