BTC holds $17K level while GBTC bouncing from the bottom

Bitcoin, cryptocurrency, and speculative risk assets are anticipating a dovish signal from Jerome Powell ahead of the release of new CPI data on Jan. 12.

BTC, CPI data, Jerome Powell, GBTC, risk assets

Written by

Edna Buckley
Published on

January 10, 2023

Key points: 

  • BTC/USD is consolidating after hitting $17,396 the previous day — the highest level since Dec. 16.
  • Jerome Powell was due to speak at a central bank meeting later in the day, with bulls hoping to see a more dovish tone after months of falling inflation.
  • However, the latest December 2022 CPI data will not be released until January 12.
  • U.S. dollar strength continued to decline in a potential boost for crypto. DXY was poised to challenge 103 for the second consecutive day.
  • On January 6th, the GBTC began a significant uptick that resulted in a 17% increase over three days.

Bitcoin held above $17,000 on Jan. 10 as risk assets await fresh cues on Fed policy.

BTC/USD 1H chartBTC/USD 1H chart. Source - TradingView

Powell kicks off US macro trigger week

Data from TradingView shows that BTC/USD is consolidating after hitting $17,396 the previous day — the highest level since Dec. 16.

The pair moved in line with gold earlier in the week and experienced a mild cooling as U.S. stocks also await a potential Fed catalyst.

Federal Reserve Chairman Jerome Powell was due to speak at a central bank meeting later in the day, with bulls hoping to see a more dovish tone after months of falling inflation.

However, the latest December 2022 Consumer Price Index (CPI) data will not be released until January 12.

Van de Poppe stated that short-term BTC price movements are unpredictable and that it's important to remain cautious.

Bitcoin's decline was exacerbated by Powell's speech yesterday, as well as a crucial resistance zone.

“Probably sweep towards $17.1K before another bounce towards $17.5K for bearish divergence or we long at $16.9K. Good volatility. Lots of dips on altcoins too.”

BTC/USD annotated chartBTC/USD annotated chart. Source - Michaël van de Poppe [Twitter]

Full-time Bitcoin trader George, who has a large social media following, was interested in a potential range of $17,000 as support.

I believe we are establishing a new range between 17k and 17.6k for the next few days,” the update stated.

Elsewhere, there was no indication of a respite for the U.S. dollar, as the strength continued to decline in a potential boost for crypto. The U.S. dollar index (DXY) was poised to challenge 103 for the second consecutive day.

U.S. dollar index (DXY) 1H chart. Source - TradingViewU.S. dollar index (DXY) 1H chart. Source - TradingView

The "discount" on GTC-backed securities has been reversed despite investor pressure.

More noticeable than the modest increase in BTC's spot price was the largest institutional investment vehicle for Bitcoin.

On January 6th, the Grayscale Bitcoin Trust (GBTC) began a significant uptick that resulted in a 17% increase over three days.

This resulted in the GBTC discount to net asset value — the current price of BTC — being the smallest in several weeks.

Previously, the negative “premium” was 38.5%, this was higher than the record low of 48.9% on December 13th, according to data from Coinglass.

The parent company of Grayscale, Digital Currency Group (DGC), continued to face criticism despite a concerted struggle from investors to regain access to their funds.

GBTC premium vs. asset holdings vs. BTC/USD chart. Source - CoinglassGBTC premium vs. asset holdings vs. BTC/USD chart. Source - Coinglass


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