Bear run of the crypto king at the end of the race? — The beginning of 2023 for Bitcoin seems to be smiling at the bulls. Indeed, Bitcoin would have been on track to confirm its strong bounce last week. Especially since optimism is returning somewhat to cryptocurrencies thanks to the fact that the total market capitalization has regained $1,000 billion. That being said, the reasons behind the current return of the king of cryptography to grace should prompt caution. Because basically nothing will be set in stone.
Moreover, the prospect of a change in the Fed’s monetary policy in 2023 will not appear, judging by the doubts of some Fed members about the possibility of reducing inflation to about 2%. But at the moment, the Bitcoin (BTC) rate does not react in any way to its shocks and prefers to be in levitation, focusing on the slightest good news.
Now, in a market context where many investors would like to believe in a fairy tale, let’s take a look at the latest bitcoin technical analysis and key levels to look out for in a possible end-of-purgatory scenario.
Bitcoin in weekly units – three weeks in a row?
Probably continuing to rise for the third week in a row, Bitcoin will confirm the $20,000 or ATH 2017 crossing. This will be the first battle won by the bulls. So that the latest signals in weekly units allow them to look up first.
First, if the rally continues, a break of the bearish run downline may look serious. Secondly, this week’s bullish candle is nothing to envy compared to the previous one. Thirdly, the courtyards manage to block Kijun. And lately, Tenkan is starting a slight bounce after the favorable momentum of the BTC price at the beginning of the year.
Unfortunately, the bear war is far from over. And it’s not for nothing that the Bitcoin exchange rate and the Chikou Span always remain below the Kumo (Ichimoku Clouds). Even if the second rejoins prices and the 200 week moving average (MM200 per week). On the other hand, the thickness of the future Kumo may moderate the bulls due to a favorable trend reversal.
Assuming that the next week will match the previous three, the situation for the bears will become tense. Because it is the BTC price that will probably approach the weekly MM200 chart and the resistance of $26,000, not far from the lower border of Kumo, Senkou Span A (SSA). Which would coincide with the Shikou Span, which would return towards Tenkan. Thus, this market scenario will prevent the threat of new lows.
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Bitcoin in Daily Units – FTX Bankruptcy Chapter to Close Soon
In daily terms, yesterday’s bullish candle could be the first psychological turning point in the bullish direction. Why ? Because the price of bitcoin is distancing itself from $20,000 and the 200-day moving average (200 MM per day). And at the same time, he strengthens his position over Kumo. Moreover, we are in the process of closing the FTX bankruptcy chapter.
However, the fact that the rebound did not result in a downward breath could reveal over-buying signals such as a large gap between prices and the Tenkan. But as long as both companies are bullish, as they are now, I wouldn’t be surprised if the king of crypto is treading water for a while longer. With a sense that it could rise to $26,000, a level that coincided with a dip below Kumo’s upper limit last August.
In the event that the rebound abortion occurs immediately, it will be interesting to see if $20,000 confirms the reversal of polarity from resistance to support. And if the answer is yes, then BTC price will make higher lows. This would mean that an uptrend is on the way with the goal of neutralizing its bearish run since its last ATH in November 2021 once and for all. On the other hand, a straight break below the recently crossed thresholds would question the bulls. With fear that the resumption of the bear run will return to the table.
As such, Bitcoin is supported by good news such as the fall in the dollar and bond rates associated with hopes of a return to normal monetary policy by the Fed. The icing on the cake, FTX’s failures seem to be partially over with prices in the danger zone or exactly $16,000.
Except that all this remains in order to anticipate the financial markets, which itself can be balanced at any moment. Moreover, US inflation remains high despite falling commodity prices. But if it struggles to get down to the central 2% target, the return of quantitative easing (liquidity injection) will not hold water.
Personally, I think the US central bank will continue to tighten monetary policy until something breaks. Therefore, let’s not talk too quickly about the end of purgatory for the crypto-king. Moreover, nothing has been resolved in the current uncertainty in the financial markets. First of all, high interest rates combined with a lack of liquidity have historically contributed to unexpected external shocks. This is why investors should wisely wait for a favorable combination of fundamental and technical analyzes to increase their risks in cryptocurrencies.
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