bitcoin price rally: FOMO stirs again in bitcoin’s best start since before pandemic

Synopsis

The token’s advance so far is the best for the opening month of a year since a 31% rally in 2020 before the pandemic hit.

bitcoin price rally: FOMO stirs again in bitcoin’s best start since before pandemic  0Bitcoin has bolted out of January’s starting gates with a climb of more than 28%, turning up the heat on bears who anticipated more challenges for riskier investments after sharp selloffs in 2022.

The token’s advance so far is the best for the opening month of a year since a 31% rally in 2020 before the pandemic hit. The surge has helped to lift the overall value of digital assets past $1 trillion, a level that gave way in November when the FTX exchange imploded, CoinGecko data shows.

The largest token rose as much as 2.5% on Monday and was trading at $21,230 as of 11:46 a.m. in Tokyo, set for a 13 straight daily advance. Smaller coins from Ether to Cardano were also in the green. Asian crypto-related stocks like Monex Group and Woori Technology Investment Co. pushed higher.

Bitcoin chart 11
The crypto climb is partly a bet on an end to punishing interest-rate hikes, a prospect that’s also boosted the likes of stocks, bonds and gold. Even so, investors are wondering if all these assets have moved too far, too fast given that central banks like the Federal Reserve are pledging to keep policy rates elevated until still-high inflation is vanquished.

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While plenty of uncertainty hangs over digital assets, including whether a short squeeze is driving up prices and will peter out, “FOMO is likely to play a role in how the market evolves from here,” Noelle Acheson wrote in her “Crypto Is Macro Now” newsletter, using the acronym for “fear of missing out.”

The crypto industry continues to brace for further fallout from the bankruptcy of FTX and ensuing fraud charges against co-founder Sam Bankman-Fried. Crypto brokerage Genesis and its parent firm Digital Currency Group are seeking to resolve debt woes, a process that could spark market upheavals.

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Meanwhile, some technical indicators suggest Bitcoin’s jump is becoming stretched. The token’s 14-day relative-strength index — a measure of momentum — has scaled 90. That’s far above the 70 level viewed as “overbought” and the highest in about two years.

This year’s Bitcoin surge is among the signs that “there’s still a lot of froth in the marketplace” and that “investors continue to ‘act’ in a much less bearish way than they ‘speak,’” Matt Maley, chief market strategist at Miller Tabak + Co., wrote in note on Sunday.

Both Bitcoin and a gauge of the top 100 digital assets sank more than 60% in 2022, a painful year that raised questions about what kind of future they have.

bitcoin price rally: FOMO stirs again in bitcoin’s best start since before pandemic  3bitcoin price rally: FOMO stirs again in bitcoin’s best start since before pandemic  4Monday, 16 Jan, 2023Experience Your Economic Times Newspaper, The Digital Way!Read Complete Print Edition »

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    Updated: 01/16/2023 — 02:00