Bitcoin price, volatility and profits are all the highest since June 2022

Key Takeaways

• Bitcoin has broken $30,000 for the first time since June 2022
• Volatility is also at its highest point since June
• Liquidity is the lowest it has been all year, meaning less is needed to move Bitcoin up (and down)
• 45% of stablecoins have fled exchanges in last four months, with market depth has not recovered from Alameda bankruptcy in November
• Interest rate forecasts have flipped, providing positive impetus as market bets tight monetary policy is coming to an end
• Low liquidity and positive interest rate expectations have kicked Bitcoin up past $30K
• Week ahead brings data on inflation, Fed minutes and earnings, and Bitcoin could move violently again depending on how it shakes out

Throw a mask on and stay beyond a 2-metre radius, because it feels like 2021 again. 

At least, looking at the cryptocurrency market, that is. Bitcoin has turned back the years to rally to its highest price since last summer, despite the economy feeling like it’s falling down all around us. $30,000 has officially been breached. 

Not only is the price at its highest point in ten months, but the volatility and profits have also ramped up to the highest points since before the house of cards all came down, while the supply on the market is dwindling.

But why? And will all this continue or will Bitcoin fall back down to Earth? Let’s dig into the data to see if there is an answer. 

Price

First, what makes the headlines pop: the price.  

Bitcoin breached $30,000 Monday evening for the first time since June 2022. To refresh the memory, that was the week of the Celsius crash, the crypto lender announcing on June 12th 2022 that it was suspending withdrawals, having been caught up in the LUNA contagion. 

Billions of customer assets were locked, and the Bitcoin price spiralled downwards, dropping below $30,000, and then $20,000, in the days afterwards. Monday was the first time it has taken back the $30,000 mark. 

The key to this resurgence? Interest rate forecasts, primarily (but not just interest rates…as we will get into in the next section). 

The forecast of the future path of interest rates has completely flipped in the last month or so, providing impetus for this leg up in Bitcoin as the market bets that we are finally ready to pivot off the aggressive hiking of rates that has been ongoing since last April. 

Last year’s…