Bitcoin Records New 2023 High as Inflation Cools and Ordinals Brings NFTs to Bitcoin
Bullish momentum returned to the crypto markets last week as investors were encouraged by US Consumer Price Index (CPI) figures.
With the CPI indicating that inflation had cooled during the month of January, market sentiment returned to one of optimism, which translated into a new 2023 all-time high for Bitcoin.
Excitement regarding Bitcoin also spilled over into the NFT sector as a new protocol has resulted in a huge uptake of Bitcoin-based collectibles.
Elsewhere, speculation regarding the incorporation of Dogecoin into Twitter’s ecosystem continued as Elon Musk posted a meme tweet involving his Shiba Inu pet dog, Floki.
- Bitcoin climbs above $25,000 for the first time in 2023
- Bitcoin Ordinals NFTs explode in popularity
- DOGE rockets higher after Elon Musk meme tweet
Bitcoin climbs above $25,000 for the first time in 2023
The world’s largest cryptocurrency by market capitalization soared by over 13% last week to reach a brand-new all-time high for 2023.
Bullish momentum was triggered by the release of US CPI results late on Tuesday, which continued throughout the remainder of the week. Warmly welcomed by investors, the new figures confirmed that inflation had cooled for the seventh consecutive month.
According to government reports, the year-on-year Consumer Price Index for the month of January dropped to 6.4%, which is down from December’s reading of 6.5%.
US CPI results from June 2019 to February 2023
Despite January’s CPI coming in higher than the expected 6.2%, market sentiment remained optimistic which translated into the entire cryptocurrency market rallying on Wednesday. Bitcoin recorded a 9% daily increase. The coin subsequently recorded a new 2023 all-time high of $25,200 on Thursday.
Despite pulling back from a strong zone of weekly resistance – between $24,000 and $25,000 – bitcoin continued to climb over the weekend for a second retest.
The latest resistance zone corresponds to previous highs from August 2022 and must be broken if bitcoin can continue to move higher.
Alongside CPI results, bitcoin’s latest tailwind was also fuelled by the recent success of Bitcoin-based NFTs – a new form of collectible that is taking the crypto space by storm.
Daily chart of BTC/USD
Bitcoin Ordinals NFTs explode in popularity
NFTs are typically associated with smart contract-enabled blockchains, such as Ethereum or Solana. However, a new class of Bitcoin NFTs has been gaining momentum throughout February and it is thanks to the launch of a brand new protocol.
The brand new Ordinals Protocol allows users to mint and transfer NFTs across the Bitcoin blockchain and it has resulted in a monumental upsurge in activity.
Although NFTs have existed on the Bitcoin blockchain previously, Ordinals significantly increases the efficiency and flexibility for creators and NFT holders.
Each NFT is inscribed to a different satoshi – which is the smallest denomination of a bitcoin. The holder of a specific satoshi then also holds the proof of ownership of the associated NFT.
Bitcoin investors are now extremely excited and optimistic as to what this new level of functionality could bring the world’s oldest and most reliable blockchain.
According to some within the crypto community, the incorporation of NFTs could release an entirely new creative innovation in the industry. If that occurs, it may encourage other blockchains to build protocols and bridges that enable more interaction with the Bitcoin blockchain.
According to analytics from Dune, there have been over 130,000 NFT inscriptions completed on Bitcoin’s network since the launch of Ordinals.
Taking inspiration from the highly successful CryptoPunks collection, one of the most popular Bitcoin-based collectibles is called Ordinal Punks. Ordinal Punks have been changing hands for extremely high prices, with one Punk NFT being sold for 9.5 BTC last week (equivalent to $215,000).
Screenshot from Ordinal Punks collection.
DOGE rockets higher after Elon Musk meme tweet
Dogecoin holders were enthused last week as Elon Musk tweeted a new meme involving his pet dog, Floki.
The tweet, which depicted Floki sitting behind a desk at Twitter headquarters wearing a CEO t-shirt, was accompanied by a comment from Musk which read, “The new CEO of Twitter is amazing.”
Tweet from Elon Musk
As a result of Musk’s previous unwavering support of Dogecoin, a cryptocurrency that found success by leveraging a Shiba Inu-based meme, sentiment in the coin spiked shortly after the tweet was published.
Dogecoin recorded a 5.4% increase in the following 24 hours and went on to record a weekly high of $0.10. With last week’s increase, the value of the coin has now climbed 26% in 2023.
Elon Musk closed the deal for Twitter in October 2022 and quickly removed the former CEO, Parag Agrawal. Although subsequently taking on the role, Musk conducted a Twitter pole in December asking users if he should remain the Head of Twitter. With 57.5% of users voting for him to step down, the entrepreneur confirmed that he would follow people’s wishes and said, “I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams.”
In January, Twitter confirmed that it would be implementing a system that enabled cryptocurrency payments to be executed via the social media platform. As a result, many crypto investors continue to speculate if such a system will incorporate Dogecoin in some way.
Musk has long been a supporter of DOGE and the Dogecoin blockchain, previously calling it the “people’s cryptocurrency.”
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