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(Kitco News) -The forward-looking outlook for the crypto market continues to improve as Bitcoin (BTC) managed to hold onto its recent gains during Tuesday trading as the total cryptocurrency market cap climbed back above $1 trillion for the first time in recent times in early November, prior to the collapse of FTX.
It was a mixed day in traditional markets as a busy week of corporate earnings kicked off, with Goldman Sachs making headlines after recording a 69% drop in earnings for the fourth quarter. As markets closed in the US, both the S&P and Dow ended the day off lower, down 0.20% and 1.14% respectively, while the Nasdaq managed a small gain of 0.14%.
Data from TradingView shows that Bitcoin’s price continued its uptrend that started last week, albeit at a slower pace, reaching an intraday high of $21,605 before pulling back to support near $21,300, where it now trades.
BTC/USD 4 hour chart. Source: TradingView
The continued uptrend for Bitcoin has pushed the top crypto to a four-month high, according to Kitco senior technical analyst Jim Wyckoff. “The BC bulls have the solid near-term overall technical advantage amid a daily bar chart price appreciation trend,” said Wyckoff, who “suggests even more near-term upside,” he concluded.
RSI indicates increased price stability
Bitcoin’s recent strength was also a focus in Arcane Research’s most recent “Ahead of the curve” market update, which noted that BTC “has seen a massive 23% gain and a 2.2% market dominance growth.” percentage points over the previous week as BTC leads the market recovery.”
The report pointed to last Thursday’s CPI print of -0.1% as the main catalyst behind the increase. “The recent increase has been fueled primarily by a short squeeze led by continued aggressive shorting,” the update said. “BTC’s push above $20,000 has been followed by stabilizing open interest, suggesting that short traders have become cautious, which may lead to prices stabilizing in the near term.”
Arcane Research referred to the current rally – which took place in the depths of a crypto winter when many traders were out of the market – as a “hated rally” as many sidelined investors shorted Bitcoin or had traded fiat in anticipation of further decline.
“This has led to a short squeeze and subsequent BTC strength, resulting in a recovery to pre-November price levels and pushing the RSI to multi-year highs, a powerful signal of changing momentum,” the analysts wrote.
The Relative Strength Index (RSI), a momentum indicator, has risen significantly over the past week and is heading towards the highs of 2019. “This supports that the rally is extended in the near term,” the report said. “It also represents the first real signal of stronger momentum in BTC since the 2021 bull market.”
The report compared the current BTC recovery to the initial recovery from the depths of the bear market of 2018. “After RSI rose above 80 in April 2019 following a relative volatility compression in March, BTC remained within the range for 40 days. Now BTC has recovered to its Q3 range, the RSI has extended and shorts are cautious, increasing the likelihood of near-term stability,” Arcane Research concluded.
Similarly, crypto market analyst Rekt Capital saw positive developments with the monthly Bitcoin RSI and highlighted the area of the previous bear market bottom as the zone where the indicator must climb above to further point to an improving outlook.
For the first time since reaching All Time Low levels…
The #BTC Monthly RSI Pushes Above Previous Bear Market Bottom Area (Green)$BTC should make this region supportive again and the RSI is doing all the right things to achieve that goal#crypto #Bitcoin pic.twitter.com/nggO7xnjn7
— Rekt Capital (@rektcapital) January 17, 2023
Altcoins continue to rise
It was a positive day overall for the altcoin market as the winners on the day outnumbered the losers in both quantity percentages changed.
Daily cryptocurrency market performance. Source: Coin360
Fetch.ai (FET) recorded the biggest gain of the day, with the artificial intelligence-focused project seeing the token price rise 17.56%, followed by a 15.6% gain for Casper (CSPR) and an increase of 15 .46% for Ocean Protocol ( OCEAN).
The total cryptocurrency market cap now stands at $998 billion and Bitcoin’s dominance rate is 41.2%.
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