Monday, February 6, 2023

Bitcoin price rally over $21K prompts analysts to explore where BTC price might go next

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After Bitcoin (BTC) hit a yearly excessive of $21,095 on Jan. 13, the place is it headed subsequent?

Bitcoin is at present witnessing an uptick in bullish momentum after the positively perceived Client Value Index (CPI) report was adopted by a robust rally throughout the crypto market. 

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The latest rally in Bitcoin is creating elevated quantity ranges and better social engagement on whether or not the worth is in a breakout of fakeout mode.

Is the Bitcoin bear market over?

Whereas the market continues to be technically in a bear market in comparison with final week, investor sentiment is enhancing. In keeping with the Worry and Greed Index, a crypto-specific metric that measures sentiment utilizing 5 weighted sources, buyers’ emotions in regards to the market hit a month-to-month excessive.

Bitcoin Worry and Greed index. Supply: different.me

Bitcoin worth is now above the psychologically essential $21,000 stage and plenty of analysts and merchants are issuing their ideas on the place BTC worth might head subsequent.

Let’s discover a number of of those views.

Bitcoin buying and selling volumes stay a priority

Bitcoin worth has but to get well from its pre-FTX ranges, however reached above $21,095 on Jan. 13 for the primary time since Nov. 8, 2022. Regardless of the power of the latest rally, some analysts consider BTC worth wants to stay above the $21,000 assist earlier than the present bullish pattern might be sustained.

In keeping with Glassnode evaluation,

“A renewed bullish pattern that began on January 1st drove bitcoin to the $18.6 – $18.9k stage, but a cross over to $19k is critical to assert a brand new buying and selling channel round $19-$21k. Resistance is anticipated round these ranges as bitcoin faces a mid-term downward pattern. If the worth fails to interrupt over the pattern line, we anticipate a retrace towards the $16-$17k space.”

BTC worth in comparison with quantity. Supply: Glassnode

The shortage of buying and selling quantity round $18,000 reveals the weak point within the present on-chain and centralized change (CEX) exercise. The biggest volumes and general exercise appear to encompass the $16,000 stage, suggesting that could be a extra strong ground than the present worth vary. With much less quantity surrounding ranges larger than $21,000, Bitcoin’s rally could possibly be capped at $21,095.

Is it only a bear market rally?

Bitcoin continues to be going through headwinds together with massive exchange layoffs in a tightening macro economic system, Gemini and Genesis authorized points and the potential institution of a US Home crypto-focused subcommittee.

As well as, Bitcoin’s relative power index (RSI) is at present exhibiting BTC as overbought. In keeping with RSI evaluation, a pointy downtrend might kind as the worth corrects.

Bitcoin RSI. Supply: TradingView

The macro markets are additionally at main resistance ranges. The US Greenback index (DXY) is at key assist which implies danger belongings like Bitcoin might begin to see a sell-off if the index recovers. Bitcoin stays correlated to equities and the SPX mini futures index can also be exhibiting indicators of a pullback.

TraderSZ explains under:

With Bitcoin buyers taking earnings as urged by TraderSZ, it might be robust for BTC to succeed in larger ranges.

Historic evaluation factors to a brand new Bitcoin backside

Bitcoin is at present under its 200-week shifting common and in response to unbiased market analyst Rekt Capital, Bitcoin worth might have already hit its macro backside in response to historic information. Traditionally the “Dying Cross” stage reveals a $23,500 backside.

Whereas merchants and technical evaluation will not be identified for precisely predicting how lengthy a bull or bear market would possibly final, unbiased market analyst HornHairs cited historic information from 2015 to estimate how lengthy it is going to take for Bitcoin to hit a brand new all-time excessive.

The bull market from 2015 to 2017 lasted for 1064 days, matching with the 2018 to 2021 bull market which lasted the identical variety of days. If merchants match the bear market that adopted between 2017 to 2018 and 2021 to the present market, it might take 1,001 days till Bitcoin reaches a brand new all-time excessive.

Regardless of the present circumstances and the power of the present worth breakout, Bitcoin has confirmed many technical analysts incorrect previously. Danger-averse merchants would possibly take into account holding a watch out for elevated buying and selling quantity at larger costs as an indicator of whether or not Bitcoin is lastly again in a bull market.