A breath of fresh air on the king of cryptocurrencies? – After painfully recalling the highlights of the Bitcoin (BTC) bear race of 2022, it is time to look ahead to 2023, which could prove to be a tense one. And it is clear that it will be necessary to send heavy bulls to overthrow the bears. Especially since the hope of a change in the FED’s monetary policy is fading according to the last minutes of the FOMC.
However, the price of Bitcoin starts 2023 quietly despite this bad news from the US central bank. So much so that many investors don’t know which foot to dance on. Worse, the king of cryptocurrencies hasn’t really reacted to the recent decline in the dollar and bond rates in recent months. But in the meantime, the FTX deal took place.
And in a market environment that forces us to navigate by sight, we sift through the latest technical analysis of BTC in the perspective that the lines are moving.
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Bitcoin in weekly units – Prices still below the Tenkan
Even though Bitcoin is expected to finish the first week of 2023 slightly higher, the courses always remain under the Tenkan. With the feeling of helplessness that they are not bouncing far enough past the $16,000 support.
First of all, BTC price and Chikou span perpetuate their respective status quo below Kumo (Cloud Ichimoku).
But by not breaking through the $16,000 at the same time, they have the merit of limiting the break for a few weeks. Secondly, crossing the descending race-to-the-bear line after a readjustment according to the latest moves does not demonstrate a strong will on the part of the bulls to challenge the bears. And lately, the price of Bitcoin hasn’t stayed above the Tenkan for long since mid-April 2022.
In the event that the king of cryptocurrencies finally breaks out of $16,000, the financial media will eventually be excited about a return towards $20,000. But graphically speaking, the fact that ATH 2017 is between Tenkan and Kijunwhich in turn are evolving horizontally so far, would constitute triple resistance which could deter bulls. Hence the difficult task that awaits them to neutralize the race to the bottom of Bitcoin since its last ATH in November 2021.
Bitcoin in daily units – Prices close to Kumo
In daily units, a dead calm reigns between the $16,000 support and the Kumo’s upper bound, the Senkou Span B (SSB). So that Bitcoin price is circulating in a tidy tight. At the same time, timidly managed to cross the Tenkanthen to approach the lower limit of the Kumo, the Senkou Span A (SSA).
In case the crypto king returns inside the Ichimoku cloud and gets rid of the Kijun, we would keep the chances of a rebound towards $20,000, which in turn would be supported by the Kumo breakout. Which would coincide with a Chikou Span that could do the same in the same way as the price of BTC. But to really ease the bulls, a breath of fresh air beyond the 2017 ATH would be the ideal scenario. With the aim that prices settle above the Kumo in daily units for some time. This would force the bears to potentially take some of their profits.
Conversely, if Bitcoin prices return below the Tenkan, a third wave of a race-to-the-bottom correction could surely resurface. On the sine qua non condition that the $16,000 no longer holds up. If so, an additional 25% downside would send the bulls back.
In summary, a bitcoin that remains frozen just above the $16,000 support, but struggles to extricate itself from the closest resistances, does not indicate a structural trend change. Until we attend to ascended prices in the direction of the Kumo in weekly units, would not provide the basis for a sustainable rebound. Suffice to say, crossing $20,000 would be no end in itself.
To make matters worse, the continuation of the FED’s monetary tightening would hardly do the crypto king’s business. But the fact that this unfavorable factor is already included in the prices could not make him jump.
Investors will need to be wary of the so-called quiet in cryptocurrencies in recent weeks. In this sense, an extremely moderate allocation to this asset class remains preferable in a market context in which we are not immune from a black swan, i.e. an event of an unpredictable nature whose impact no one would be able to assess at time T.
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