Bitcoin and the broader cryptocurrency market posted notable gains on January 11, 2023, as investors positioned themselves ahead of a crucial US Consumer Price Index report that could set the tone for the weeks ahead. Bitcoin climbed to approximately $17,935, gaining roughly 2.8% over 24 hours and extending its weekly advance to over 6%, while Ethereum outperformed with a 7% weekly gain to trade near $1,388.
TL;DR
- Bitcoin rose to ~$17,935, gaining 2.8% in 24 hours and 6.35% over the week
- Ethereum surged 7% for the week to ~$1,388, with dominance rising to 17.6%
- Markets buoyed by strong jobs data and slowing wage growth
- US December CPI data release on January 12 is the next major catalyst
- Bitcoin dominance dipped to 37.6%, signaling broad-based altcoin strength
Market Momentum Builds on Macro Optimism
The rally gained traction following the release of the December nonfarm payrolls report on January 6, which showed the US economy added 223,000 jobs — exceeding economist expectations of 200,000. Equally important for markets, wage growth came in below expectations at 0.3% month-over-month versus the 0.4% consensus forecast. The combination of strong hiring and moderating wage inflation was interpreted as a sign that the Federal Reserve’s aggressive rate-hiking campaign was beginning to produce the desired cooling effect on the economy without triggering an immediate recession.
Equity markets responded with enthusiasm. The Dow Jones Industrial Average and the S&P 500 each rose approximately 1.5% for the week, while the Nasdaq gained 1%. The US Dollar Index (DXY) weakened to the 103 level, providing an additional tailwind for risk assets including cryptocurrencies.
Bitcoin’s Low Volatility Precedes a Move
One of the more notable developments heading into January 2023 was Bitcoin’s realized volatility plunging to multi-year lows of 24.6% during December. Historical analysis suggests that such compressed volatility environments have almost universally preceded significant price moves. Of the handful of prior instances with similarly low readings, most led to higher prices, with only one notable exception in November 2018 when Bitcoin suffered a dramatic decline.
On-chain metrics painted a picture of patient holders. The percentage of Bitcoin supply that has remained unmoved for over one year reached 66% by the end of December 2022, up from 57% at the beginning of that year — a clear signal that long-term holders were not capitulating despite prices sitting approximately 75% below the all-time highs set in 2021.
Ethereum Gains Outpace Bitcoin
Ethereum’s weekly gain of 7% outstripped Bitcoin’s advance, a trend reflected in the shifting dominance figures. Bitcoin’s share of the total crypto market capitalization slipped to 37.6% on January 11, down from 38.5% recorded earlier. Ethereum’s improving position came even as the network faced headwinds from the ongoing controversy surrounding Digital Currency Group (DCG) and its subsidiary Genesis Trading, which were under investigation by the US Department of Justice.
Bitcoin exchange inflow volumes remained subdued at between $350 million and $400 million per day — a fraction of the multi-billion dollar daily flows seen throughout 2021 and 2022. The reduced selling pressure from low inflows contributed to the upward price action.
All Eyes on CPI
The next major test for crypto markets arrived on January 12, when the US Bureau of Labor Statistics released the December CPI data. Investors were hoping for a continuation of the disinflationary trend observed in previous months, which would give the Federal Reserve room to moderate the pace of future rate increases. A favorable CPI reading could sustain the risk-on momentum that carried Bitcoin and Ethereum higher in the first full trading week of 2023.
Commodity markets reflected a mixed macro backdrop. Brent Crude fell 8% and WTI dropped nearly 10% on China COVID concerns and recession fears, while gold rose 2.4% on the back of dollar weakness — a signal that safe-haven demand remained robust even as risk assets rallied.
Why This Matters
The January 11 rally was significant because it demonstrated that crypto markets were beginning to decouple from the worst of the industry-specific contagion narrative and instead responding to macroeconomic catalysts. With Bitcoin’s realized volatility at historic lows and long-term holder conviction at near-record levels, the setup favored a decisive directional move. The CPI print the following day would determine whether that move would be higher or whether the bear market would reassert control.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
223k jobs added and wage growth under expectations. fed finally getting what they wanted, crypto rallies. coincidence
ETH outperforming BTC with 7% weekly gains tells you where the smart money is flowing post-merge
btc dominance dropping to 37.6% with altseason kicking off. this is the rotation trade we were waiting for
DXY at 103 is doing heavy lifting here. every time the dollar weakens crypto pumps, its basically a trade now
24.6% realized volatility in december and now this breakout. low vol compression into a move, textbook