Bitcoin Surges Above $19,000 for the First Time Since the FTX Collapse

Bitcoin (BTC) has reached a new milestone, surpassing the $19,000 mark for the first time since the FTX crisis. This is the highest value Bitcoin has achieved since November 8, 2022, when the FTX scandal peaked.

Price Movements of Major Cryptocurrencies as of 08:05 AM on January 13, 2023. Source: Coin360

On the morning of January 13, Bitcoin’s rally in 2023 continued as it hit $19,117. This represents an increase of over 4% in the past 24 hours and more than 15.5% since the year began at $16,541.

1D Chart of BTC/USDT on Binance as of 08:05 AM on January 13, 2023

The recent recovery in Bitcoin’s price has been driven by U.S. inflation data, which has shown a decline for the sixth consecutive month, reaching its lowest level since October 2021. This has led market participants to anticipate that the Federal Reserve might slow down its interest rate hikes, causing the USD to weaken against other assets.

The Fed’s next meeting to decide on interest rate adjustments is scheduled for February 1. According to the latest report, the U.S. central bank plans to maintain its interest rate hike strategy for 2023, targeting a rate of 5.1%. For comparison, the Fed raised rates from 0.25% to 4.5% in 2022.

U.S. Inflation Trends by Month in 2022. Source: Trading Economics

Unlike previous occasions, the cryptocurrency market has not yet fully benefited from Bitcoin’s recent surge. Ethereum (ETH), the second-largest cryptocurrency, reached a daily high of $1,438, the highest since November 8, 2022.

1D Chart of ETH/USDT on Binance as of 08:05 AM on January 13, 2023

In contrast, top altcoins are mostly moving sideways with little volatility.

In the last 12 hours, over $180 million in derivative positions were liquidated, equally split between BTC and ETH, with short positions slightly dominating at 61%.

Cryptocurrency Liquidation Data for the Last 12 Hours, Source: Coinglass as of 08:05 AM on January 13, 2023