A slight improvement in inflation for the month of January has led to the crypto market reacting strongly to the upside.
A rather modest down tick in the new inflation print for January might have been expected to lead to an equally modest rise in markets. None of it. Bitcoin rose strongly and altcoins followed its lead with both making some excellent gains so far on Wednesday.
Bitcoin above strong support
Bitcoin climbed as high as $22,900 on the day, but it has since pulled back to around $22,700. Short term indicators suggest that this might be the local top for now, but the important thing is that the price is now holding nicely above bitcoin’s midrange point of $21,480.
Looking further out in the longer term, it does look good for bitcoin here. A 47% increase since the start of this year has been followed by a decent 12% correction in order to test what looks like a very strong support now at the midpoint of the range.
It might be hoped that bitcoin meanders towards the top of the range at $25,225. The longer it takes to get there, the more price structure will have been built, and it wouldn’t go amiss even if bitcoin came down once more to test that midpoint.
Selected altcoins make most of the gains
As bitcoin becomes stronger the top-performing altcoins will likely far outperform it, perhaps until the time when bitcoin may crash through $25,000 and heads for $30,000.
One thing to be cognizant of in this altcoin run is that not all altcoins are killing it. The vast majority may make some modest gains, but it is constantly the same few altcoins that are making all the main running.
The two strong narratives of artificial intelligence and zero knowledge tokens have well and truly led the surge. SingularityNET and Fetch.AI from AI, and Dusk Network and others from the ZK category have really performed.
Other altcoins from different niches are also making some excellent gains. Render (RNDR) with distributed GPU cloud rendering is one of these, up 355% since January 1. Fantom (FTM) is a fast layer 1, also up considerably over the same time frame.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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