Goldman Sachs ranks Bitcoin as one of the best-performing investment instruments ahead of gold, the US Treasury note, and the S&P 500 index. With a risk-adjusted return (Sharpe ratio) of 3.1, Bitcoin has outperformed all cryptocurrencies and major financial products in the traditional financial market, according to Goldman Sachs. The Sharpe ratio is used to measure performance adjusted for market volatility. The higher the ratio, the better the investment, currency or stock in terms of risk-adjusted returns.
Bitcoin takes the lead amid strong market rally
On a smaller time horizon, Bitcoin continues to regain lost ground. Slowly but surely, Bitcoin is trying to break the $23,800 resistance level. Bitcoin seems to be looking for another bullish momentum with another healthy pullback below the resistance line.
Despite the fact that the recent crisis of the crypto market occurred in parallel with the collapse of FTX and the decline of the global economy, and brought negative consequences for retail and institutional investors, the market noticed the return of market makers appearing on crypto exchanges.
Contrary to Goldman Sachs’ analysis, CoinGecko in its annual report however, it found Bitcoin to be the worst-performing asset among major currencies, with a significant decline of 64%. CoinGecko also noted that since January 2022, the spot market has seen a 67% drop in trading volume.
However, the new year started very positively for Bitcoin and the market. The leading cryptocurrency increased its volume and volatility indicators by $200 billion, according to data from CoinMarketCap.
Bitcoin has also changed market sentiment amid a continuous rally since the beginning of a year. Analysts look bullish in the short term and expect the cryptocurrency to rise as high as $30,000. However, in the longer term, according to economist Lyn Alden, Bitcoin may be in “significant danger”. Because in the second quarter of 2023, liquidity risks will increase significantly.
The bulls are still holding on
With Bitcoin price now consolidating below a major resistance zone, the cryptocurrency is looking for a trendline breakout. The aim is to position yourself above the next hurdle at $24,500.
The rising 20-day moving average at $20,700 and the Relative Strength Index (RSI) in the overbought zone near 80 suggest that Bitcoin’s bullish trend line may continue and reach new highs.
Conversely, bears are also poised to stop Bitcoin’s upward movement and reverse the market’s momentum and direction. But for now, the bulls seem unwilling to surrender. However, speculation is playing an increasing role due to uncertainties in the market and the upcoming Federal Open Market Committee (FOMC) meetings.
At the time of writing, Bitcoin has gained nearly 8% over the past seven days. In the last 24 hours, it has traded around $23,000 with sideways movement. The current capitalization of the currency stands at $444 billion, surpassing all crypto market assets.
