Bitcoin on January 21, 2023 – The end of the purge for the King of Cryptocurrency?
A bear run of the king of cryptos at the end of the race? – The beginning of 2023 in Bitcoin is smiling on the bulls. Indeed, Bitcoin would be on track to confirm last week’s strong rebound. Optimism, in particular, is returning somewhat to cryptocurrencies thanks to a total market capitalization that has regained $1,000 billion. However, the reasons behind the cryptocurrency king’s current return to favor should encourage caution. Because, in principle, nothing would be written in stone.
Moreover, the prospect of a change in the Fed’s monetary policy will not be achieved in 2023, due to the doubts of some members of the Fed about the possibility of reducing inflation to close to 2%. But for the moment, the Bitcoin (BTC) course does not react to its shocks and prefers to levitate, focusing on the smallest piece of good news.
Now, and in the context of a market where many investors want to believe fairy tales, let’s take a look at the latest technical analysis of bitcoin and the key levels to watch in the context of a possible end of the purge scenario.
Bitcoin in weekly units – Three weeks in a row?
Probably the third week in a row of bullish chains, Bitcoin will confirm the $20,000 or 2017 ATH crossing. This will be the first fight the bulls win. Thus, the latest signals in weekly units will allow them to look to the upside first.
First, if the rally continues, breaking the bear breakout line will start to look serious. Second, this week’s ascending candle has nothing to envy compared to the previous one. thirdly, yards manage to pass over Kijun. And lately, Tenkan is starting to bounce back a bit after BTC’s favorable price momentum at the beginning of the year.
Unfortunately, the war against bears is not over yet. And for good reason, The price of Bitcoin and Chikou Spa still remains below Kumo (Ichimoku Cloud). Even if the latter closes again with prices and the 200 weekly moving average (weekly MM200). On the other hand, the upcoming Kumo thickness may calm the bulls in terms of a favorable trend reversal.
Assuming next week is anything like the previous three weeks, things will get tougher for the bears. Because exactly BTC price may approach weekly 200-MA and $26,000 resistance, Senkou Span A (SSA) not far from Kumo’s lower boundary. It will coincide with a Chikou Span that will turn in the Tenkan direction. Thus, this market scenario would avoid the threat of a new downside.
>> Prefer to keep your cryptos safe? Select Ledger wallet (commercial link) <
Bitcoin in daily units – FTX bankruptcy section is about to close
In daily units, yesterday’s ascending candle could be the first psychological turning point on the bullish side. Why? Because the price of Bitcoin is moving away from $20,000 and the 200-day moving average (daily MM200). And at the same time, it strengthens its position above Kumo. Even better, we are in the process of closing down the bankruptcy division of FTX.
However, the fact that the rebound does not take a breather downwards can reveal overbought signals, such as a large gap between prices and the Tenkan. But with both of them riding the bullish momentum they are now, I wouldn’t be surprised if the king of cryptocurrencies still floats for a while. With a feeling it could go up to $26,000a level that coincided with a failure below last August’s Kumo ceiling.
If the rebound abortion occurs immediately, It will be interesting to observe if $20,000 confirms the polarity change from resistance to support. If the answer is positive, the price of BTC will reach higher levels. This means that an uptrend is approaching with the aim of neutralizing the bear run once and for all since the last ATH in November 2021. On the other hand, an open break below the recently crossed thresholds will doubt the bulls. Fearing that the recovery of the bear run is back on the table.
In summary, Bitcoin is full of good news such as falling dollar and bond yields, which are linked to hopes of a return to normal monetary policy from the Fed. The icing on the cake is that FTX’s setbacks seem to be partially behind this, given that prices are well or precisely in the $16,000 danger zone.
Except that all of this remains an expectation created by the financial markets, which itself can be balanced at any time. Not only that, but inflation remains high in the US despite lower commodity prices. But if it struggles to land around the central 2% target, a quantitative easing (liquidity injection) would not stand up.
Personally, I think the US central bank will continue to tighten monetary policy until something breaks. Therefore, Let’s not talk too soon about the end of the purge for the king of cryptos. Especially since nothing has been resolved regarding the current uncertainties in the financial markets. Above all, a high interest rate environment accompanied by a lack of liquidity has historically created conditions for unexpected external shocks. Therefore, investors should wisely wait for a favorable combination between fundamental analysis and technical analysis to increase their cryptocurrency exposure.
Do not save on cryptocurrency with caution! So, the best solution for keeping your crypto assets safe is still a personal hardware wallet. In Ledger, there is something for all profiles and all cryptos. Don’t wait to put your capital to safety (commercial link)!