Bitcoin briefly rises above $24,000, extending its new year rally amid a broader gain in tech stocks
- February 2, 2023
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Bitcoin briefly touched the $24,000 level on Thursday, reaching a key technical level and building on its January rally.
The up move came a day after the Federal Reserve raised its benchmark interest rate by a quarter percentage point. But Fed Chairman Jerome Powell noted that a disinflationary process has started, soothing investors that are betting on inflation to fall and causing them to take on more risk.
Bitcoin was last trading about 1% higher at $23,819.26, according to Coin Metrics. The cryptocurrency rose to $24,069.00 earlier in the afternoon, after rising as high as $24,249.70 Wednesday night, its highest level since Aug. 17.
“The market took the latest FOMC as dovish, but bitcoin’s rally remains precarious,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. “The price did rise on Wednesday, but failed to close above $24k and its momentum seems to be on the decline.”
Hasegawa echoed the Fed’s warning that although inflation appears to be decelerating, it “remains elevated” and the central bank will need “substantially more evidence to confidently say that inflation is coming closer to their 2% target.”
The jump also coincided with a broader rally in stocks led by the Nasdaq as well as a drop in U.S. Treasury yields and the U.S. Dollar Currency Index (DXY), which tend to move inversely to crypto.
Bitcoin has rallied more than 40% since the start of the year, quickly paring losses from its disastrous 2022. Many investors and analysts are wary, however, that despite the current bullish trend, crypto isn’t ready for a rocket ship rally yet, and prices could pull back at least once more before it is.
January was bitcoin’s best month since October 2021 and its best January since 2013.