A rapid rise in the price of Bitcoin and other cryptocurrencies saw the market return above $1 trillion.
At the time of writing (7am UK), Bitcoin is trading at $21,150, its highest level since early November and 23% higher than its price a week ago.
And Twitter’s Bitcoin Fear and Greed Index, which produces a score for overall market sentiment by combining data such as volatility, market momentum and volume, social media and Google Trends, moved into the neutral zone – 52 – over the weekend, its highest level since April 2022.
It has since dropped back to 45, just into the ‘fear’ zone, but has been in the 20s for much of recent months.
Nigel Green, CEO and founder of financial advisor deVere Group – which has launched a crypto exchange – says “the signs are the bulls are beginning to take back control”.
Pointing to the latest US inflation data, which revealed that CPI slowed to 6.5% in December from 7.1% the previous month, he said: “As inflation in the world’s largest economy is, it seems, being brought under control thanks to the Federal Reserve’s aggressive interest rate hikes, it makes it more likely that the central bank will begin to take its foot off the brake of the economy by slowing the hikes.
“The Fed will continue hiking rates for a while yet – albeit at a slower pace – as they can’t afford to slide backwards. Officials will continue to sound hawkish too in order to avoid over-excitement in the markets and wider complacency.
“[But] as the central banks begin to stop tightening the screws, and the cyclical upturn gets underway, asset classes [such as crypto] could outperform others. Knowing they are likely to be rewarded for doing so, many crypto investors are positioning themselves now for the pivot.
“Of course, the crypto market will not go in a straight line – no market ever does – but we expect the bears to go into hibernation and bulls are ready to run.”