Posted January 18, 2023
By Ray Blanco
Bitcoin Blasts Off
We’re a few weeks into 2023 now and although the market has managed to kick the year off in the green, we’re still seeing the major indices stand still in the range they’ve been in since the end of summer 2022.
Today we saw some more back and forth with many stocks climbing higher in the morning only to give gains back as the day progressed.
Then, you have a heavily sold-off stock like Tesla Inc. (NASDAQ: TSLA) which led the pack yesterday with a big rally while the Dow slipped lower by 1%.
Semiconductors have really turned things around so far this year with a meteoric rise.
Right now, the VanEck Semiconductor ETF (NASDAQ: SMH) is up about 12% in 2023.
That’s definitely quite a different start from the nearly 10% drop SMH saw in the same amount of time at the start of 2022.
Still, consolidation is reigning in the rally today but the market continues to show signs of strength as earnings season gets underway.
Elsewhere in the market, the dollar is lower, interest rates are ticking lower, and investors are starting to show a change in sentiment.
While market conditions improve there are more and more opportunities for traders to capitalize on these moves.
Another beaten-down space that’s rallying right now is cryptocurrency.
Although down today alongside the broader market, bitcoin has rallied over $20,000 and continues to hold the line.
$20,000 is an important psychological and technical number for bitcoin, so a rally above this level is good to see if you’re a crypto bull.
Still, many would-be crypto investors remain put off by all the recent fraud and scam allegations that plague the space.
I think we’re quite a ways away from seeing crypto get back to where it was during those pandemic highs, but some green is certainly nice to see.
Bitcoin Blasts Off
Bitcoin, and cryptocurrency as a whole, unfortunately, ran into headline after headline of bad press.
The situation was looking bleak, it felt like new fraudulent activities were being uncovered everywhere you looked.
Perhaps the biggest and most troubling was the fall of FTX and its former leader Sam Bankman-Fried.
But despite all odds, bitcoin had some more gas left in the tank…
Earlier today, bitcoin was able to climb all the way to $21,500.
This action saw the flagship cryptocurrency surpassing the level it stood at the beginning of November, just before FTX’s implosion.
Right before the FTX fiasco, bitcoin was sitting around $21,000, only to fall all the way down to $15,000 as one of the world's largest crypto exchanges went bankrupt and its leader was outed as a fraud and a scammer.
Then, bitcoin struggled to gain any traction to rally higher than $16,500 for a few months before embarking on its current rally.
According to CoinDesk data, the price of bitcoin is now at its highest since mid-September.
Analysts attribute today’s rally to this morning's bigger-than-expected decline in the December producer price index (PPI).
Couple that with an even bigger drop in December retail sales and you have an environment where bitcoin can decouple from the broader market and make a move higher.
However, that move was short-lived as bitcoin came back down to Earth as the day progressed.
But even still, bitcoin is holding its ground above $20,000, a very important psychological level as I mentioned above.