Will the King of Cryptocurrencies Return to $20,000 and Above Soon? It’s not a real firework but it looks a bit like it. Indeed, the price of Bitcoin (BTC) is regaining altitude at the time of writing. To the point that it’s making its way past $20,000 or the 2017 ATH. US inflation continues to fall.
However, Could this rebound, which gained momentum the day before yesterday, mean the bulls’ revenge?, who have suffered so much in 2022? What is certain today is that the year 2023 is starting off on the right foot. However, we will remain cautious: the real reason for this rebound is rather to be attributed to a liquidation of short positions. That’s why I advise you not to get excited too quickly while waiting for real signals that could sound like the real capitulation of the bears.
In a market environment where major uncertainties could be phased out such as the current drop in US inflation, we examine the latest technical analysis of the cryptocurrency king and possible scenarios in the near future.
Bitcoin in Weekly Units: Prices above $20,000 and Kijun
This week’s bullish candle has enough to reignite the bulls. And for good reason, the Bitcoin price is higher than the Tenkan. But most of all, she is currently sporting over $20,000 and the Kijun as we speak. At the same time, the Chikou Span is coming back very close to the prices. As a result, the once doomed crossing of the descending line would again be reconsidered under certain conditions.
However, the amazing week we are witnessing is not a game changer regarding the status quo of the BTC price and the Chikou Span under the Ichimoku cloud, Kumo. And if you have the intelligence to take a good look at the weekly chart, it is clear that we are only recovering the losses related to the failure of FTX. Like what, between the lines, euphoria is not appropriate. Indeed, the current rebound does not allow for the time being to fill the last wave of correction from last spring.
Assuming the price of Bitcoin crosses the Kijun and $20,000 simultaneously, I wouldn’t say jackpot for the bulls. But the return towards the resistance of 26,000 dollars would temporarily eliminate the danger of a new wave of bear run correction. Which would coincide with a Chikou Span probably in contact with the Tenkan.
Conversely, a failure below $20,000 in the form of a false upside breakout could be detrimental. With the fear that the crypto king could sink again towards $16,000 or even below, if stress were to suddenly reappear on the financial markets.
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Bitcoin in Daily Units – Prices and Chikou Span above the Kumo
Last week we dropped a bitcoin price not far from Kumo in daily units. From now on, has largely catapulted beyond the cloud, thanks to a series of consecutive upward candles since Jan 08. Even better, so is the Chikou Span. Which would be the first since April 2022.
While BTC’s price drifting away from the Tenkan could be a sign of overbought, this in itself wouldn’t be a short-term nuisance as long as the two continue to follow each other to the upside. This would ultimately favor an extension of the rebound towards $22,000. But if we want the scenario towards $26,000 to gain in probability, a temporary consolidation would perhaps be necessary to hope for a strong move from the bulls.
In this sense, the latter would have control over prices on a sufficiently large time scale to lay the foundations for a neutralization of the race to the bottom of the crypto king since its last ATH in November 2021, before glimpsing a new bull run. Otherwise, we have a margin of safety against the Kumo if the Bitcoin price falls below the next resistances.
Is it time for the revenge of the bulls? I would tend to say no as long as the current bounce doesn’t result in higher highs and lower lows than previous ones. And as such, it is simply nothing. However, I don’t remain narrow-minded if we can validate returns on old resistances like $20,000 in the near future. But on the other hand it will be necessary to count on the important thickness of the future Kumo in weekly units. And the fact that the Chikou Span will take some time to get back above the cloud would encourage me to be vigilant.
As far as the fundamental plan is concerned, bulls and bears should be attentive to the evolution of the Fed’s monetary policy. For the past few months, the decline in inflation in the United States would maintain hopes of an end to the cycle of rate hikes. This explains the recent good performance of cryptocurrencies supported by a favorable conjunction between the dollar’s decline and bond rates. And assuming that goes smoothly, perhaps the horizon would clear for the king of cryptocurrencies.
On the other hand, if the Fed were to hesitate to end its monetary tightening by noting that labor market strength remains an inflationary threat, it could unpleasantly surprise us by raising key rates, not close to or above inflation. .
Therefore, the challenges of the days/weeks to come are two, at the same time or at different times. The first would be to know if Bitcoin were able to chain the sessions by crossing the resistances. This would mean that we start from the basis of a neutralization of the bearish race waiting for real catalysts capable of amplifying the potential rebound. As for the second, we will have to be patient with the next FED meeting on the 1stum February. And from this precise moment a real trend could emerge on the king of cryptocurrencies for the first part of the year 2023.
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