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Morgan Stanley explains why Bitcoin price is rallying

Cryptocurrency News Jan 18, 2023 08:55
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By Senad Karaahmetovic 

Bitcoin (BTC) price has rallied nearly 30% since the beginning of the year to trade above the $21,000 handle for the first time since early November. The world's largest digital asset staged a massive rally last week when it rose 22%.

According to Morgan Stanley analysts, the rally has been fueled by a liquidation of short BTC futures positions.

"Markets are watching to see if bitcoin can sustain a move higher into a new trading range or if this rally has simply allowed troubled crypto companies to liquidate more of their asset holdings," they wrote in a client note.

The crypto analysts note that the ongoing bear market has so far followed a similar trajectory to the one in 2017/18.

"BTC's rally has been rapid and driven more by technicals than a fundamental shift in market participant view. Trading volumes are low, and institutional activity is unlikely to pick up unless BTC trades materially higher," they added.

The analysts urged Morgan Stanley's clients to pay attention to technical levels of $22,770 and $25,200 on the upside, as well as $15,500 on the downside.

As of 08:40 EST (13:40 GMT), Bitcoin trades at $21,260 -0.6% higher on the day.

Morgan Stanley explains why Bitcoin price is rallying
 

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