The Bitcoin cryptocurrency made its 13th consecutive day higher, rising by 2.5% on Monday to trade at $21,230.
According to Arabiya.net, smaller coins such as Ether and Cardano also rose, as did Asian stocks linked to cryptocurrencies such as Monex Group and Woori Technology Investment Co.
Bitcoin entered 2023, with an increase of more than 28%, as the cryptocurrency's rally is the largest in the world so far, the best for the opening month of the year since a 31% rise in 2020 before the pandemic.
CoinGecko data showed that the increase helped push the total value of digital assets past $1 trillion, a level that vanished in November when the FTX exchange crashed.
The rise of cryptocurrencies is partly a bet on the end of rising interest rates, a possibility that also boosted the rise of stocks, bonds and gold. However, investors are wondering if all of these assets have moved too far, too quickly given that central banks like the Federal Reserve pledge to keep interest rates high until still-high inflation is wiped out, according to Bloomberg.
Cryptocurrency expert, and author of the book Cryptography is Macro Now, Noel Acheson, supports that a lot of uncertainty is hovering around digital assets, and believes that the current rises may be driven by what is known as “short pressure”, or Short Squeeze, which may fade quickly, but fear A missed opportunity or FOMO may play a role in how the market evolves from its current areas.
Caution is necessary in the current times, as the cryptocurrency industry continues to brace for further fallout from the FTX bankruptcy and subsequent fraud accusations against co-founder Sam Bankman Fried. Cryptocurrency brokerage Genesis and its parent company, Digital Currency Group, are also seeking to solve debt problems, a process that could lead to market turbulence.
Meanwhile, some technical indicators suggest that Bitcoin's jump has become extended. The symbol's 14-day RSI - a measure of momentum - rose to 90. This is well above the 70 level which is seen as overbought and the highest in about two years.
As Miller Tabak + Co's chief market strategist wrote, in a note on Sunday, Matt Maley: Bitcoin's rally this year is among the signs that there is still a lot of risk in the market and that investors continue to act less conservatively than they speak out.
