With the ongoing crackdown on major players in cryptocurrency such as centralized exchanges Kraken and Binance, many participants expected further legs down for many of the top cryptocurrencies. However, the market has once again proven us wrong, with an 11% gain on Bitcoin in the last 24 hours, rallying many projects further.
This move was in spite of poor macroeconomic forecasts, including the recent CPI announcement that send the stock market sliding.
So why has crypto rallied over the last few days, and are we about to see a mini bull run?
Also Read: Here’s What They Won’t Tell You About The Bear Market
Money Printer Go BLURRRRR
Blur’s airdrop was one of the most profitable and well-known releases in recent memory. While eligibility for the airdrop were relatively simple, almost 7% of circulating supply being given away in one day meant that users received upwards of thousands of dollars on average.
The Ethereum-based NFT marketplace rewarded users for listing and bidding on NFT collections. Users could also get more “points” for bids on top collections, which would result in larger airdrops.
While prices quickly tanked from $5 to $0.5, it has since rebounded and stabilized around $1.
With users receiving thousands of dollars in free tokens, it is likely that many have sold it for stablecoins or blue-chip cryptocurrencies, including Bitcoin and Ethereum.
Smart Money Has Been Buying The Dip, says JieData
While the implosion of FTX caused crypto’s total market capitalization to fall below $1 Trillion and sparked fear in many retail participants, on-chain data analysis platform JieData says that whales have been scooping up blue-chips at these low prices.
Data from their team shows that more that more than 27,000 Bitcoin were scooped up by strong hands last year, when Bitcoin momentarily fell below $16,000 – it’s lowest recorded price in the last 2 years.
“A significant number of whales have completed positions in the 16k to 18k range”
Since then, close to 60,000 Bitcoin has been bought up by smart money, a noticeable uptick compared to the start of 2022, when $BTC was trading in the $30,000 range.
Furthermore, there has been a rise in stablecoin inflow into centralized exchanges, with the exception of $BUSD, which has been negatively affected by US regulation.
USDC has seen the largest inflow into centralized exchanges, with almost $1 Billion flowing into Binance alone.
Due to the continuous absorption of blue-chips at these low prices and stablecoin netflow into exchanges, we have likely found a true bottom for this bear market.
Bitcoin Beginning To Brush Off Poor Macro News?
While Bitcoin’s narrative as an inflation hedge failed to hold up in the last year, it has been performing surprisingly well this year in face of negative macroeconomic sentiments. Although it saw a minor sell off following the latest CPI announcement, it quickly reversed the move, rallying 3% instead.
This was in contrast to the stock market, with the S&P 500 opening down 0.50% and closing down 0.05% on the day.
Combined with Ordinals, an NFT project being built on the Bitcoin Network, $BTC has managed to finally rise above its 3-month high, and is currently trading slightly below $25,000.
Closing Thoughts
As the crypto markets establishes new local highs, on-chain activity has also been returning, with transactions on the Ethereum Network up 16% since the start of the year. Renewed interest around AI-themed coins and NFTs have also spurred certain sectors higher, putting in double to triple digit returns for some.
Furthermore, the already depressed prices means that there has been more buyers than sellers, especially as whales and smart money continue to scoop up blue-chip cryptocurrencies.
Although it is not clear whether we are out of the woods yet, these factors point towards a bullish future for Bitcoin and the rest of crypto for the first half of 2023.
Also Read: We Asked 5 Industry Leaders For Their 2023 Market Outlook
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief
