Bitcoin Bulls on the Rise in January 2023: What You Need to Know

•Bitcoin has had its best January since 2013, with BTC/USD remaining over 40% up year-to-date.

• The coming week will be dominated by the Federal Reserve’s interest rate hike and accompanying comments from Jerome Powell.

• An on-chain metric, the Profit and Loss (PnL) Index from CryptoQuant has issued a “definitive buy signal” for BTC—the first since early 2019.

• Bitcoin hodlers have remained disciplined despite recent price gains; coins dormant in wallets for five years or more hit new all-time highs of 27.85%.

• According to the Crypto Fear & Greed Index, sentiment among Bitcoin investors is now predominantly one of “greed”—its highest reading since November 2021’s all time high prices

BTC 1 week candle chart courtesy of TradingView

The cryptocurrency market has had a remarkable start to 2023, with Bitcoin leading the charge. After gaining nearly 20% in January, Bitcoin is now trading at an all-time high of over $40,000. The impressive performance this month has been driven by a number of factors, including increased institutional interest and an upcoming halving event. But what does this mean for the future of Bitcoin? To understand where the markets may be headed next, it’s important to look at key indicators such as the CryptoQuant PnL Index and the Crypto Fear & Greed Index.

Bitcoin Hodlers Holding Firm Despite Increasing Prices

One key indicator of Bitcoin’s future performance is the activity among long-term BTC holders, or “hodlers”. Recent data from Glassnode suggests that record levels of Bitcoin are being stored for extended periods of time – that is, they are not being moved or sold despite rising prices. This could indicate strong bullish sentiment among investors who are confident that prices will continue to increase in the near future. In other words, hodlers believe that holding onto their BTC now will pay off later when prices rise even higher.

BTC Monthly returns chart source: Coinglass

Crypto Fear & Greed Index Indicates Investor Greed

Another useful tool to gauge investor sentiment is the Crypto Fear & Greed Index (F&G). This index measures investor sentiment by looking at a range of factors such as volatility and market momentum. Currently, the F&G index indicates that investor sentiment is firmly in “greed” territory – which could be interpreted as a sign of further price increases in the near future. This also suggests that investors remain bullish on Bitcoin despite its recent gains and are confident about its prospects for further growth in 2021 and beyond.

Binance BTC order book source: Material Indicators

Overall, January has been an impressive month for cryptocurrencies – and it looks like there may still be more gains to come. Investors appear to be confident about Bitcoin’s prospects for further growth thanks to indicators such as long-term hodlers and high levels of greed on the F&G index. With key events such as halvings coming up soon, it will be interesting to see how these indicators develop in the coming weeks – and how they affect Bitcoin prices going forward.

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