The price of Bitcoin (BTC) is back below $21,000. The cryptocurrency failed to clear a midway resistance zone between $21,000 and $22,000. A sharp correction cannot be ruled out with a possible retest of key levels below $20,000.
A spike against a slowdown in inflation for the price of Bitcoin
Bitcoin price rises to $21,632 and falls to $20,435 on Bitfinex today, January 18, 2023. Cryptocurrency it is trading at $20,782 at the time of writing this article. Its price is currently posting a daily loss of 1.91%.
Bitcoin attacked that resistance zone again at $21,300 to $21,575, as the Bureau of Labor Statistics released encouraging numbers on US inflation.
The producer price index (PPI) fell by 0.5% in December. The founder of the trading company Eight, Michaël van de Poppe, noticed that “PPI stands at 6.2%, while the forecast was 6.8%”. Core PPI comes in at 5.5%, against expectations of 5.7%.
On paper, these numbers tend to confirm that the US Federal Reserve (FED) shouldn’t more aggressive excursions federal funds rate to control inflation.
Heading for a retest of levels just below $20,000?
Though Bitcoin continued to climb and hit its highest level in just over four months today, the resulting rejection also saw it dip below $21,000. The 5-hours chart of Bitcoin price shows that the cryptocurrency could be on the verge of lose Kijun Sen from Ichimoku (red curve and blue circle) to $20,913, as support.
If this support were to break permanently, the next major support could be at the daily Tenkan Sen (black line), which is currently at at $19,726.
The threshold of a supertrend and the Whale support level
While the day could end rather abruptly in the red after the recent sharp rises, analysts have pointed to levels well below $20,000, which bulls need to defend or could serve as major support.
Analyst Matthew Hyland indicated that Bitcoin must hold above $17,900 to keep the cryptocurrency’s 3-day supertrend in the green. This supertrend only recently “officially flashed green” after more than 13 months in the red.
The analyst clarified that this level to defend, to keep this supertrend in green, will rise if Bitcoin “reaches new local highs”.
In addition to Matthew Hyland, the Whalemap team are also eyeing levels well below $20,000. He shared a graph showing a concentration of whales at $16,190which could therefore act as an important support in the event of strong corrections, which would erase the gains of this month of January.
Could the pause in the $21,000 rise be followed by a return below $20,000 for the price of Bitcoin? The next few days will allow us to evaluate the solidity of these key supports mentioned above, in the face of pressure from the bears, who could become overbearing again.
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