January set to prove best Bitcoin’s month since October 2021

Bitcoin rallied more than 37% in the first month of the new year. The famous cryptocurrency is expected to have January as its best monthly return since October 2021.

Analysts pointed to the weaker US dollar, inflation expectations, and institutional buying support catalyzing this rally. The fading impact from squeezed short positions, as well as troubled firms needing to cash in their profits on bitcoin, make $25,000 the next key price level to watch.

Bitcoin is currently changing hands at $23,000, and the BTC/USD pair is trading at its highest level since August. At the time of typing, the pair is trading at 22927.00.

Bitcoin is an extreme risk-on asset and those assets will do well when interest rates finally begin to fall again. The total market capitalization for cryptocurrencies is up 24% to $1.04 trillion. On exchanges worldwide, crypto spot trading volume has risen 64% to $4 trillion over the same period, according to crypto indexing platform Nomics.

Trading volume jumped 82% to $1.15 trillion, putting the largest cryptocurrency behind only stablecoin Tether (USDT-USD) as the most traded coin so far this year.