Bitcoin: The rally is being ‘manipulated’

© Reuters – Bitcoin finally recovered from losses caused by the FTX collapse, sending the price down to a November 11 low of $15,501.

While Friday’s closing price of $19,927 has already led to a test of the $20,000 psychological mark, resistance at the $21,000 psychological mark has already been tested on Saturday. After Sunday’s correction, a new intermediate high may be formed today at $21,414.

At 45, the Bitcoin Fear and Major Index is about to move into the neutral zone, reflecting positive market sentiment. On Sunday, the sentiment index reached this important zone, reaching 52, its highest level since early April last year.

Very experienced trader Peter Brandt sees an inverted head-shoulders formation forming on the weekly and monthly charts. He expects a near-term rally towards $25,000, thus a downward correction and a retest of the neckline to form his predicted chart. If the inverse head-and-shoulders formation he talks about actually happens, that neckline will be $18,387.

Looking ahead, Brandt expects bitcoin to hit $50,000 again this year before breaking the magical $100,000 mark in 2024. $13,000, we don’t think we’ll see that level again.

According to Bloomberg, bitcoin has already gained more than 28% in January. This is the best start to the year so far. BTC was able to surpass this result only in January 2020, when it increased by 31 percent before the start of the pandemic.

The rise in risky assets such as cryptocurrencies appears to be linked to market prices at the end of the Fed’s tight monetary policy. Although the US central bank has recently said that interest rates will remain high for a long time, investors have a different view. They assume that if there is a recession in the economy, the central bank will have to change its mind on this issue.

The adjustment in the stance of monetary policy is not new to the market, as for a long time Fed Chairman Powell and many members of the FOMC believed that the rise in inflation was only temporary.

Only when this argument didn’t hold up, a period of monetary tightening was triggered, causing cryptocurrencies to quickly retreat from their all-time highs.

Former SEC employee John Reed Stark, on the other hand, believes that the recent increase in the price of bitcoin is due to market manipulation.

This is based on an analysis by Forbes which found that 51% of the daily trading volume on 157 exchanges was not real.

Bitcoin: technical indicators

Bitcoin is currently registering a gain of 0.77% at $20,781 BTC/USD, with a weekly gain of 22.73%.

The cryptocurrency reached a fresh average today at $21,414, from where a downward correction took place under the pressure of overbought conditions (RSI at 85). The 23.6% fibo retracement offers support at $20,018, which is psychologically supported at $20,000.

Bitcoin Tageschart

A daily close below this level would favor an extension of the downside correction to the 38.2% Fibo retracement towards $19,155. Unless the 200-day MA at $19,524 is permanently breached, the medium-term outlook remains positive.

If the mid-high of $21,414 can be broken, after breaking the psychological mark of $22,000, the focus will shift to the 123.6% Fibo extension at $22,809.

By Marco Oehrl

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