Cryptocurrency king bear race at the end of the race? – The beginning of the year 2023 on Bitcoin seems to smile on the bulls. Indeed, Bitcoin would be well on its way to confirming its strong rebound from last week. Especially as optimism is somehow returning to cryptocurrencies thanks to a total market capitalization that has regained $1 trillion. That said, the reasons that explain the current return to grace of the king of cryptocurrencies should lead to caution. Because basically, nothing would be written in stone.
Furthermore, the prospect of a change in the monetary policy of the Fed would not be acquired in 2023, according to the doubts of some members of the Fed on the ability to reduce inflation to around 2%. But for the moment, the Bitcoin (BTC) price is not reacting to its upheavals and prefers to levitate by focusing on the slightest good news.
Now, and in a market environment where many investors would like to believe in a fairy tale, let’s review the latest technical analysis of Bitcoin and the key levels to watch in the context of a possible end-of-purgatory scenario.
Bitcoin in weekly units: three consecutive weeks?
Probably chaining a third consecutive week higher, Bitcoin would validate $20,000 crossing or ATH 2017. This would constitute a first fight won by the bulls. So that the latest weekly unit signals allow them to look mostly to the upside.
Firstly, the break of the descending line of the bearish run would start to look serious if the rally continues. Secondly, this week’s bullish candle has nothing to envy from the previous one. Thirdly, the courtyards manage to override the Kijun. And lately, the Tenkan is starting a slight rebound after the favorable BTC price momentum earlier in the year.
Unfortunately, the war against the bears is far from over. And for good reason, Bitcoin price and Chikou Span still remain below the Kumo (Ichimoku Cloud). Although the second relates to prices and the 200-week moving average (MM200 per week). The thickness of the future Kumo, on the other hand, could temper the bulls in view of a favorable trend reversal.
Assuming next week is in line with the previous three, things would become tense for bears. Because precisely, BTC price could approach the weekly 200-MA and the $26,000 resistance, not far from the lower limit of the Kumo, the Senkou Span A (SSA). Which would coincide with a Chikou Span returning in the direction of the Tenkan. And so, this market scenario would ward off the threat of new lows.
>> Prefer to keep your cryptocurrencies safe? Choose a Ledger Wallet (trade link) <
Bitcoin in daily units – FTX bankruptcy chapter is about to be closed
In daily units, yesterday’s bullish candle could be a first psychological turn to the upside. How come ? Because the price of Bitcoin is pulling away above the $20,000 and 200-day moving average (MM200 per day). And at the same time it consolidates its position above the Kumo. Even better, we’re about to close FTX’s bankruptcy chapter.
However, the fact that the rebound has not been breathed to the downside could reveal signs of overbought, such as the large gap between prices and the Tenkan. But as long as both are riding bullish momentum as they are right now, I wouldn’t be surprised if the king of cryptocurrencies is still treading water for a while. With the feeling that it could rise towards $26,000a level that coincided with the Kumo’s failure below the upper limit last August.
In the event that an out-of-bounce occurs immediately, it will be interesting to observe if the $20,000 will confirm the change of polarity from resistance to support. And if the answer is positive, then the BTC price will record higher and higher lows. This would mean that an uptrend is looming with the aim of neutralizing once and for all its downward run since the last ATH in November 2021. On the other hand, a sharp break below the recently exceeded thresholds would cast doubt on the bulls. With the fear that the resumption of the bearish race will come back to the table.
In summary, Bitcoin is supported by good news such as the drop in the dollar and in bond rates linked to hopes of a return to normal monetary policy by the Fed. The icing on the cake, FTX’s setbacks appear to be somewhat behind, as prices are well within the danger zone or precisely $16,000.
Only that all of this remains in the order of an anticipation made by the financial markets, which in turn could be counterbalanced at any moment. Not only that, inflation in the US remains high despite falling commodity prices. But if it struggles to fall around the central 2% target, the return of a quantity facilitation (liquidity injection) would not hold.
Personally, I think the US central bank will continue to tighten monetary policy until something breaks. So, let’s not talk too soon about the end of purgatory for the king of cryptocurrencies. Especially since there is nothing definite about the current uncertainties on the financial markets. Above all, high interest rate environments accompanied by a lack of liquidity have historically favored unexpected external shocks. This is why investors should wisely wait for a favorable conjunction between fundamental and technical analysis to increase their cryptocurrency exposures.
In cryptocurrency, do not save on prudence! So, to keep your crypto assets safe, your best bet is still a personal hardware wallet. To the ledger, there is something for all profiles and all cryptocurrencies. Don’t wait to secure your capital (trade link)!