{"id":10088,"date":"2023-01-30T21:12:47","date_gmt":"2023-01-30T21:12:47","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=10088"},"modified":"2023-01-30T21:12:48","modified_gmt":"2023-01-30T21:12:48","slug":"bitcoin-aims-for-25k-as-institutional-demand-increases-and-economic-data-soothes-investor-fears","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=10088","title":{"rendered":"Bitcoin aims for $25K as institutional demand increases and economic data soothes investor fears"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Bitcoin (BTC) price broke above $22,500 on Jan. 20 and has since been able to defend that level \u2014 accumulating 40.5% gains in the month of January. The move accompanied improvements in the stock market, which also rallied after China dropped COVID-19 restrictions after three years of strict pandemic controls.<\/p>\n<p>E-commerce and entertainment companies lead as the year-to-date market performers. Warner Bros (WBD) added 54%, Shopify (SHOP) 42%, MercadoLibre (MELI) 41%, Carnival Corp (CCL) 35% and Paramount Global (PARA) managed a gain 35% so far. Corporate earnings continue to attract investors&#8217; inflow and attention after oil-producer Chevron posted the second-largest annual profit ever recorded, at $36.5 billion.<\/p>\n<p>More importantly, analysts expect Apple (AAPL) to post a mind-boggling $96 billion in earnings for its 2022 on Feb. 2. The $2.3 trillion tech company results vastly surpasses the $67.4 billion profit that Microsoft (MSFT) reported in 2022. Strong earnings also help to validate the current stock valuations, but they do not necessarily guarantee a brighter future for the economy.<\/p>\n<p>A more favorable scenario for risk assets came largely from a decline in leading economic indicators, including homebuilder, trucking surveys and contracting Purchasing Managers Index (PMI), according to Evercore ISI&#8217;s senior managing director, Julian Emanuel.<\/p>\n<p>According to the research from financial services firm Matrixport, American institutional investors represent some 85% of the recent purchasing activity. This means large players are &#8220;not giving up on crypto.&#8221; The study considers the returns occurring during U.S. trading hours but expects the outperformance of altcoins relative to Bitcoin.<\/p>\n<p>From one side, Bitcoin bulls have reasons to celebrate after its price recovered 49% from the $15,500 low on Nov. 21, but bears still have the upper hand on a larger time frame since BTC is down 39% in 12 months. <\/p>\n<p>Let&#8217;s look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market conditions. <\/p>\n<h2>Asia-based stablecoin demand approaches the FOMO region<\/h2>\n<p>The USD Coin (USDC) premium is a good gauge of China-based crypto retail trader demand. It measures the difference between China-based peer-to-peer trades and the United States dollar.<\/p>\n<p>Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, the stablecoin&#8217;s market offer is flooded, causing a 4% or higher discount.<\/p>\n<p><em>USDC peer-to-peer vs. USD\/CNY. Source: OKX<\/em><\/p>\n<p>Currently, the USDC premium stands at 3.7%, down from a 1% discount two weeks prior, indicating much stronger demand for stablecoin buying in Asia. The indicator shifted gears after the 9% rally on Jan. 21, causing excessive demand from retail traders.<\/p>\n<p>However, one should dive into BTC futures markets to understand how professional traders are positioned.<\/p>\n<h2>The futures premium has held a neutral stance since Jan. 21<\/h2>\n<p>Retail traders usually avoid quarterly futures due to their price difference from spot markets. Meanwhile, professional traders prefer these instruments because they prevent the fluctuation of funding rates in a perpetual futures contract.<\/p>\n<p>The three-month futures annualized premium should trade between +4% to +8% in healthy markets to cover costs and associated risks. Thus, when the futures trade below such a range, it shows a lack of confidence from leverage buyers \u2014 typically, a bearish indicator.<\/p>\n<p><em>Bitcoin 3-month futures annualized premium. Source: Laevitas.ch<\/em><\/p>\n<p>The chart shows positive momentum for the Bitcoin futures premium after the basis indicator broke above the 4% threshold on Jan. 21 \u2014 the highest in five months. This movement represents a drastic change from the bearish sentiment presented by the futures&#8217; discount (backwardation) present until late 2022.<\/p>\n<p><em><strong>Related: <\/strong><strong>Bitcoin price is up, but BTC mining stocks could remain vulnerable throughout 2023<\/strong><\/em><\/p>\n<h2>Traders are watching to see if the Fed broadcasts plans to pivot<\/h2>\n<p>While Bitcoin\u2019s 40.5% gain in 2023 look promising, the fact that the Nasdaq tech-heavy index rallied 10% in the same period raises suspicions. For instance, the street consensus is a pivot on the Federal Reserve (FED) quantitative tightening policy at some point in 2023 \u2014 meaning interest rates would no longer be increased.<\/p>\n<p>Bitcoin derivatives and stablecoin demand exited the panic levels but if the FED&#8217;s expected soft landing takes place, the risk of a recessionary environment will limit stock markets&#8217; performance and hurt Bitcoin&#8217;s \u201cinflation protection\u201d appeal. <\/p>\n<p>Currently, the odds favor bulls as leading economic indicators show a moderate correction \u2014 enough to ease the inflation but not especially concerning as solid corporate earnings confirm.<\/p>\n<p class=\"post-content__disclaimer\">The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<p class=\"post-content__disclaimer\">This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.\n<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/bitcoin-aims-for-25k-as-institutional-demand-increases-and-economic-data-soothes-investor-fears\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin (BTC) price broke above $22,500 on Jan. 20 and has since been able to defend that level \u2014 accumulating 40.5% gains in the month of January. The move accompanied improvements in the stock market, which also rallied after China dropped COVID-19 restrictions after three years of strict pandemic controls. E-commerce and entertainment companies lead [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10089,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-10088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10088"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10088\/revisions"}],"predecessor-version":[{"id":10090,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10088\/revisions\/10090"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/10089"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}