Bitcoin price: from worst January since 2018 to the best week in 4 months
As January came to a close, and bitcoin's (BTC) performance in the market had been quite negative, the outlook did not look very promising for the cryptocurrency. But this quickly changed during the first week of February, which closed as BTC's best percentage performance since the middle of last October. The weekly candle closed 11.88% up for the market's leading cryptocurrency, slightly less than in the period between October 11 and 17 last year. On that occasion, the rise was 12.57% in TradingView data.
In the last seven days, BTC went from $37,881 to $42,380 if we take the opening and closing points of the week. When writing this article, the cryptocurrency is still traded on exchanges above $42,000. It was still below the price at which it started this 2021. However, BTC has recovered from a fall that took it to a barely sustained floor above $33 thousand in mid-January. The one just ended is now two consecutive weeks in the green for the cryptocurrency.
If we compare this last week with that of October 11, we see that it was the third consecutive weekly candle to the upside, all with upward movements that exceeded a 10% increase. Shortly after came the breakout of the all-time high price, by then at $64,000. Then, during the second week of November, a new ATH - still in force - of 69 thousand dollars per unit was reached. This ATH, which is still in force, came amid a three-week run of the green market. Since then, this behavior has not been repeated. There had not even been two consecutive weeks of gains until the last one in January and this first one in February.
First green month since October?
The beginning of February looks promising, with more than 10% up at the moment. Especially, taking into account that at the close of January, BTC had already accumulated three months in the red: -7.10% in November, -18.85% in December, and another -16.77% down in January of this year, bitcoin's price behavior had been so negative that the first month of 2021 was BTC's worst January since 2018, as we reported in CryptoNews. This, moreover, contrasted with two consecutive very positive January: 29% in 2020 and 14% in 2021.
However, last week the upturn was vigorous. Particularly on Friday, February 4. That day, in a matter of three hours, bitcoin rose more than 8% in a surge that dragged down the rest of the significant market currencies. At the time of writing, the market price of BTC is $42,650. Today, Monday, February 7, the coin is up a moderate sub-1% from its opening price. February is just beginning, but the market seems to be showing positive signs as we advance.
Markets a day: bitcoin rises 11% in one day after two weeks of moderate rise
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The last two weeks have seen a reversal of the downward trend in bitcoin price, which recorded a 17% decline at the close of January, establishing this initial month of 2022 as the worst January for bitcoin price since 2018, reported by CryptoNews.
Within this downward trend, which began last November 10, there was a moderate price rebound in the last week of January of 4.5%, and the recovery was accentuated in the first week of February. This Sunday, February 5, bitcoin's price boom for the week was 8%. However, most notable in the last seven days was the extraordinary 11.5% rally on Friday the 4th, when it went from USD 37,313 to USD 41,589, as reported in this medium. Bitcoin, which had so far shown an increasing correlation with traditional assets, received a boost in the last week of January due to the Federal Reserve's announcement of an interest rate hike, scheduled for next March as reported in CryptoNews. However, in recent days, the S&P 500 and Nasdaq indices have been affected by that expectation of higher interest rates. For, they pulled back last February 2, and then the rally of both for Friday the 4th was around 3%.
Given this weakness in traditional assets, Bloomberg analyst Mike McGlone points out that assets such as gold and bitcoin are perceived as a basis for investment diversification. The chart below shows the daily candlesticks of the bitcoin price since the beginning of the year. As can be seen, the moderate rally seen in the last days of January was accentuated in the first week of February, especially by the notorious increase on Friday the 4th.
Smallholders of bitcoin continue to accumulate.
The fall in bitcoin prices has not driven away small investors. Specifically, the holders with less than 1 BTC are called shrimpers. Not only have they maintained bitcoin accumulation since 2017, but they have increased the pace of purchase. As seen in the graph below, in January 2018, this segment of holders held less than 3% of the bitcoin supply and currently exceeds 5%. Within those with less than 1 BTC, the largest group comprises those having between 0.1 and 1 BTC, which reach almost 4% of the supply. There are three delimited zones, and it can be seen that the pace of buying accelerated in March 2020 and then intensified in May 2021, when the correction that led to a price low in July 2021 began.
For Fidelity, bitcoin is a superior form of money.
Fidelity Digital Assets, the Fidelity Investments agency specialized in managing cryptocurrencies at the institutional level, stated in the report "Bitcoin First" that investors should consider bitcoin separately from other cryptocurrencies. The study, commented by CryptoNews, argues that "no other digital asset is likely to surpass bitcoin as a monetary good, because bitcoin is the most secure, decentralized and robust digital money," relative to other cryptocurrencies.