- The price of Bitcoin breaks the $22,000 resistance as investors position themselves ahead of the Ethereum crash.
- Cryptocurrency market capitalization is showing signs of bottoming out, with the path of least resistance heading north.
- The price of bitcoin may pull back to gather more liquidity on the 200-day SMA before the uptrend resumes.
The price of Bitcoin broke the resistance at $22,000 on Monday. This comes after a general market rally triggered by the largest cryptocurrency at the end of last week. Investors appear to be strategizing ahead of the Ethereum merger that puts the $25,000 BTC target within reach.
Key Points to Consider Before an Ethereum Merger
Ethereum is about to undergo its biggest software update dubbed Merge. The largest smart contract token will be transitioned from Proof of Work (PoW) consensus to Proof of Stake (PoS) consensus.
According to Netcost-Security reporter Ekta Murya, investors expect bitcoin price growth to slow down ahead of the crash and the release of consumer price data. Both events could lead to increased price volatility in bitcoin due to changes in traders’ forecasts and inflation rates – against the backdrop of increased volatility.
Read More: Ethereum Price Prediction, $2,000 Revision, Merger, and ETH Blockchain Vulnerability
Bitcoin Price Will Consolidate Uptrend After Small Pullback
The U.S. inflation rate is expected to pick up, which will initially dampen Bitcoin’s price performance. On the other hand, the flagship cryptocurrency is targeting $25,000, but withdrawals may have priority first. However, the four-hour chart shows a strong supply zone around $23,000.
Bitcoin price needs to close the day above this level to confirm a rise to $25,000. Otherwise, investors should start adjusting to short-term dips. Traders can confirm new short positions when BTC price breaks the $22,000 support.
BTC/USD 4 hour chart
It is worth noting that the upcoming Bitcoin price pullback may not be long-lived if the 200-day Simple Moving Average (SMA) solidifies support at $21,469. The area between $20,800 and $21,469 represents an area of massive demand, which is driving the price of Bitcoin north.
Analysts such as Mikael van de Poppe believe that the crypto market is signaling a potential bottom. He cites the rebound of the 200-week moving average that caused the price of bitcoin to hit $25,000 in July. The rally was followed by a retest and then a strong bounce, which added credibility to the bullish BTC price prediction.
#crypto’s total market cap is still signaling a potential bottom.
Bounced off the 200-week moving average and culminated in the #Bitcoins rally to $25,000.
After that, repeat the test and return to normal very strongly.
Looks like we’re ready to go. pic.twitter.com/gKagVSktN3
— Michael van de Poppe (@CryptoMichNL) September 12, 2022
On the other hand, the Moving Direction Index (DMI) on the same four-hour chart suggests that the price of bitcoin is gradually running out of its bullish momentum. A pullback is needed to gather more liquidity before pushing up to $25,000.