Bitcoin flirts with longest winning streak in nearly a decade

The biggest digital asset was little changed on Tuesday after rising for 13 straight days, adding more than 25% to trade above $21,000, nearing its longest winning streak since November 2013. , according to data compiled by Bloomberg.

The rise has helped lift the global value of digital assets to almost $1 trillion, according to data from CoinMarketCap, a level below which it fell in November following the FTX crisis.

Other tokens are also up, with an index of the top 100 coins adding around 2.5%. Shares of some cryptocurrency-related companies see even higher gains, including Coinbase Global Inc., Riot Platforms Inc. Y Marathon Digital Holdings Inc.

“It looks like macro investors are coming back, but timidly, and BTC is the entry asset, the first one they are likely to jump on” wrote Noelle Achesonauthor of the “Crypto Is Macro Now” newsletter.

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It’s a promising start to the year for the token, which in 2022 fell 64% to its second-worst annual performance on record. And the uptick has renewed enthusiasm that had previously waned, with followers enthusiastically tweeting about fear of missing out on new gains, even as the industry is still grappling with one of its darkest episodes to date amid fallout from the collapse of the FTX empire and others.

Bitcoin has outperformedastronomically” the 50-day moving average, according to Bespoke Investment Group, and is also trading above its 200-day moving average. So far, it has recouped most of the decline since prices plunged following the FTX crash.

The coin’s 14-day Relative Strength Index now sits at 91. A reading of 30 or below is generally interpreted as a sign of an oversold stock, while 70 or above means overbought.

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Frank Cappellerifounder of CappThesis, said that overbought conditions have been bullish for bitcoin throughout its history. He noted that the last two times the Relative Strength Index was above 80 was after a previous sizable decline.

The 2022 crash has undoubtedly spooked both retail and institutional investors, who have seen some of the most beloved cryptocurrency companies implode in embarrassing fashion.

Trading volumes have plunged in cryptocurrency markets, which means that any activity can trigger volatility. The volume of operations was around US$ 48,000 million in the last 24 hours, according to data from CoinMarketCap.

Even so, Bespoke notes that, despite the drop in volumes, last week there was an increase of about 1.5 times more than the average of the last 50 days.

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But why this renewed enthusiasm? Several analysts, like Adam Farthingchief risk officer B2C2point to a lack of selling, as well as short liquidations, which have reached a high dating back to July 2021, when bitcoin bottomed out around $30,000, and consequently “it shot itself”.

“The main reason for the speed of movements seems to be short sales”wrote Farting in a note this week.

Meanwhile, other risk assets have also advanced to start the year, with the S&P 500 adding more than 4% so far in 2023, and the Nasdaq 100 advancing close to 6%. Crypto analysts say that is also a major reason why digital assets have been able to rally.

“We are seeing a movement of risk”said Tony Rothinvestment director of Wilmington Trust Investment Advisorsreferring to digital assets. “Right now, bitcoin is the nicest house in a relatively shabby neighborhood. There is a good chance that bitcoin will survive over time.”