As December inflation figures fell to 6.5% Bitcoin led the crypto market in a continuance of its rally.
Price inflation much lower
The consumer price index (CPI) figures came in today, and on an annualised basis inflation hit the expected much lower rate of 6.5%, down from 7.1% a month ago.
With what surely must be seen as quite an aggressive drop, bitcoin made hay and led most of the crypto market higher, although initially bitcoin did appear to falter and it took the market a few hours to digest the news and decide that the move was upwards.
Bitcoin continues its rally
At time of going to press bitcoin has been up as high as 5.8% on the day. A move of this kind of magnitude to the upside has not been seen that often since bitcoin has traversed down and sideways since June of last year.
Given that the relative strength indicators (RSIs) have topped on the daily time frame, it could be time for bitcoin to take a pause for a while, but who knows, as first $19,000, and then the $20,000 resistances beckon.
Another thing going in Bitcoin’s favour is the weakness of the dollar. The dollar index (DXY) is continuing to roll over and has hit a new local low of 102 today. USDT dominance is also falling fast and is heading down to the 200-day moving average located at around 7.5%.
AI surges higher
A niche within crypto that is making some really stunning gains at the moment is that of artificial intelligence (AI) related projects. With all the buzz around Chat GPT, and Microsoft looking to make a $10 billion investment, eyes have focused more on AI in crypto.
Singularity Net has risen 115% in the last week, Fetch AI is up around 100% so far, and VectorSpace has also done 114% over the same time period. Many other AI related cryptos are also doing extremely well.
Time for a retrace?
With il Capo Of Crypto tweeting that in his view this is “one of the biggest bull traps I’ve ever seen”, it is perhaps time for Bitcoin and crypto to take a breather, and who knows, retrace back down a fair way again.
One of the biggest bull traps I’ve ever seen.
— il Capo Of Crypto (@CryptoCapo_) January 12, 2023
Bear rallies are notorious for being quite violent, but usually end in tears eventually. Nevertheless, the bottom needs to be found at some point, and many factors are pointing to a bottom already being made at $15,500. Time will tell.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.