The news of Genesis’ bankruptcy was already factored in by traders, who believed it would not have a significant influence on the price of bitcoin today.
The year-to-date high of $21,427 in the price of bitcoin has some investors optimistic that the market has bottomed. On January 21, bitcoin’s cost jumped.
The price of Bitcoin is still increasing despite the bad news involving the cryptocurrency lender Genesis. The increase in Bitcoin value following Genesis’ bankruptcy case may indicate that the news was already included in the price of BTC.
A declining U.S. dollar index and supportive Federal Reserve remarks following inflation data in the Consumer Price Index Report can maintain BTC above the $21,000 level after the equity markets continued their rise from the previous week.

The favorable CPI report issued on January 12 by the Bureau of Labor Statistics (BLS), which showed total inflation for all urban consumers dropping by 0.1%, appears to have been a major driver of the rally.
The inflation rate dropped by the most since April 2020. Equities traders are also reacting by pushing up prices in the expectation that the encouraging news will encourage the Federal Reserve to raise interest rates more gradually at its meeting of the FOMC on February 1.
The US Federal Reserve, which is in charge of increasing interest rates, has already taken note of the positive inflation data.
Thanks to increases in the Dow Jones, S&P 500, and Nasdaq, the stock market got off to a brighter start on January 20. The price of bitcoin has continued to be closely correlated with that of American stocks, and today’s increase is no exception.
Here are a few causes behind today’s increase in the price of bitcoin.
Positive CPI data causes the Bitcoin to reach fresh highs
Since the price of bitcoin increased to a record high of $21,427 on January 20, some analysts believe that $21,000 will now serve as the new BTC price floor. The $58.5 billion in Bitcoin trading reported on January 15 reached a new yearly high, despite the fact that the volume of BTC trade has not yet returned to pre-FTX crash levels.
The CPI numbers show that inflation has been falling for six consecutive months. The rapid decline in gasoline prices was one of the biggest drops in the report. Used and new automobile prices both fell. The CPI report comes with a warning that the price of services and food is still very high.
If inflation has reached its peak, the Federal Reserve may decide to reverse its recent policy of fast interest rate increases. Many traders think that the price of Bitcoin may rise if the Federal Reserve modified its present trajectory of quantitative tightening and interest rate increases.
The FOMC starts its meetings on January 31 with an interest rate decision anticipated the following day. Positive inflation numbers could influence the FOMC’s decision and drive up BTC and stock prices. The market has recovered from the underwhelming US bank Q4 2022 earnings announcements as investors wait for more information on the expected Fed decision.
Longer-term data is in Bitcoin’s favor
The CPI report’s indication that the US Federal Reserve would begin gradually raising interest rates in 2023 may also be contributing to investors’ growing confidence in the cryptocurrency sector.
A worldwide benchmark product used in the derivatives market by CME Group, which anticipates interest rates, indicates a high likelihood that increases may be less than originally expected in the near future.

The graph suggests that the rate hikes may be slowing down. Investors feel that the potential for additional rate declines is being supported by public attitude, which suggests that the crypto market may rebound broadly.
Bitcoin benefits from the US dollar’s decline
The declining U.S. dollar index is another encouraging sign for the price of bitcoin (DXY). In the past, sentiment has increased for risky assets like Bitcoin when the DXY retracts.

A general summary of the economy is provided by the S&P 500, Dow, and Nasdaq. The major stock indices and Bitcoin currently have a close relationship.
Therefore, if interest rates decline and the economy grows, Bitcoin might continue to rise with the bullish stock market. The price of bitcoin benefits from a favorable macro condition.
Although the Fed’s favorable remarks have given the price of bitcoin some short-term bullish momentum, the longer-term problems of centralized exchange insolvencies, impending crypto legislation, concerns about Binance’s reserves, potential spillover from Digital Currency Group’s legal problems, as well as Genesis bankruptcy, could put a damper on BTC’s current rally. Some analysts continue to think that a drop to $15,000 is feasible.