Bitcoin price surged during the weekend, flipping past the psychological level of $20,000. BTC has been hovering above the $21,000 level over the weekend, its highest level since November 8, 2022. Bitcoin’s total market capitalization has jumped by more than 28% over the weekend to $400 billion.
Catalysts Behind BTC’s Rally
Bitcoin price has been on a strong rally for the past week, climbing by more than 21%. There are several catalysts behind Bitcoin’s rally. First, the cooldown in the US inflation saw the Bitcoin price jump to $19,000 on Thursday last week.
According to the US Bureau of Labor Statistics, annual US inflation declined in December to its lowest level in more than a year. According to data published by the BLS, the US Consumer Price Index (CPI) declined for the sixth consecutive month, registering an annual increase of 6.5%. Even so, the decline is not enough to stop the Federal Reserve from hiking interest rates.
Second, El Salvador recently passed legislation allowing the country to issue sovereign Bitcoin-backed bonds. El Salvador was the first country to make Bitcoin legal tender in September 2021. According to a report by Bloomberg, El Salvador’s congress has approved a bill that would allow raising funds via the “world’s first sovereign blockchain bond.” The bill with almost 80% approval, is part of President Nayib Bukele’s plan to sell Bitcoin-backed bonds.
Bitcoin Price Prediction
The daily chart shows that Bitcoin price has been on a strong upside trajectory for the past week. The world’s most valued digital asset has managed to move above the 25-day and 50-day moving averages. Its Relative Strength Index (RSI) has slightly slipped from the overbought region. Its RSI jumped to 86 over the weekend, its highest level for four years on the daily timeframe.
Taking a closer look at the technicals, Bitcoin price is likely to be bullish in the near term. Bulls will be eyeing the next resistance at $23,109.25. Even so, a move below the important level of $17,000 cannot be ruled out.