Bitcoin dips into red but holds strong above US$23.5K


By James Rubin,

3rd February 2023 – (New York) A late Thursday price dip notwithstanding, optimism continued wafting through crypto markets a day after the U.S. central bank’s modest price hike surprised few monetary policy observers.

Bitcoin was recently trading just above $23,500, down 1.8% over the past 24 hours but still well above last week’s support near $23,000. The largest cryptocurrency has risen about 40% this year amid investors’ growing optimism about inflation and the economy. The Federal Reserve’s 25 basis point (bps) increase bolstered markets’ sense that bankers were succeeding in their question to staunch stubbornly high prices.

In an interview with CoinDesk TV’s “First Mover” program, Mark Connors, head of research at Canadian investment manager 3iQ, said that despite its recent gains, bitcoin was still trading below its 200-week moving average.

“We believe that as we get nearer [to the 200-day average] – which is a huge fundamental catalysts for bitcoin, and we have no reason to believe it won’t be again – that [bitcoin] will see an even further move higher,” Connors said.

Connors comments dovetailed with a CoinDesk report that bitcoin and the S&P 500 were approaching an easy-to-track bullish technical signal – a golden cross. A golden cross occurs when the 50-day simple moving average (SMA) of the security’s price moves above its 200-day SMA, producing a cross on the price chart

Ether fared similarly on the day, dipping late to also fall 1.8% from Wednesday, same time. The second largest crypto in market value was recently changing hands near $1,650. Other major cryptos declined late in the day to flatten or also drop into negative territory. APT, the token of layer 1 blockchain Aptos, plunged 6.5% to lose some of the ground it has gained this year. APT rose more than any other token in January. GALA, the token of the Gala Games play-to-earn platform declined 5%. The CoinDesk Market Index, a measure of the crypto market’s performance, was recently down 1.8%.

Equity markets enjoyed a banner day with the tech-focused Nasdaq and S&P 500 rising 3.2% and 1.4%, respectively as investors’ hopes about inflation outweighed their concerns about disappointing fourth quarter results on Thursday from Apple and Alphabet and a wider slowdown in the once fearsome technology sector. “Financial markets believe inflation will decline more quickly than the Fed is currently thinking,” Edward Moya, senior market analyst at foreign exchange market maker Oanda, wrote in an email.

3iQ’s Connors noted increasing interest recently in 3iQ’s crypto exchange traded funds, part of larger wave that saw investors pour more than $200 million into these types of products in January, according to crypto data provider group Crypto Compare.

“We had more smiles,” Connors quipped. “We had to bring in some new coins to satisfy inflows. That was good. And it wasn’t kind of crazy numbers. It was it was a nice healthy number.”

Connors added that current growth is sustainable. “I think the [price] entry point is so good. If people are buying, they’re the type of people who really want in. So there’s not FOMO going on right now even though we’re up. I really like this layer of buyer coming in here because they’ve done the work, they’ve shaken off the FTX debacle as a bad actor, a fraud.”