after bitcoin (BTC) reached a yearly high of $19,501 on January 13, where is it headed next?
Bitcoin currently We are seeing a pickup in bullish momentum After the positively perceived Consumer Price Index (CPI) report, a strong rally followed across the cryptocurrency market.
The recent rally in Bitcoin has created increased volume levels and higher social engagement on whether the price is in fake outbreak the situation.
Is the bitcoin bear market over?
While the market is still technically in a bear market compared to last week, investor sentiment is improving. According to the Fear and Greed Index, a cryptocurrency-specific metric that measures sentiment using five weighted sources, investor sentiment about the market is at a monthly high.
Bitcoin price is now approaching the psychologically important $20,000 level, and many analysts and traders are issuing their thoughts on where bitcoin price could go next.
Let’s explore some of these perspectives.
Bitcoin trading volumes remain a concern
Bitcoin price has not yet recovered from pre-FTX levels, but it reached above $19,501 on January 13 for the first time since November 8, 2022. Despite the strength of the recent rally, some analysts believe that Bitcoin needs to reach $21,000 before it can. Maintain the current uptrend.
According to Glassnode analysis,
“The renewed uptrend that started on January 1st led bitcoin to $18.6-$18.9K, however a cross to $19K is necessary to claim a new trading channel around $19-21K. Resistance is expected around these levels as Bitcoin is facing a medium-term bearish trend, and if the price fails to break the trend line, we expect a bounce towards the $16-17k area.”
The lack of trading volume around $18,000 shows twice the current on-chain exchange and center (CEX) Activity. Greater volume and overall activity appears to be surrounding the $16,000 level, suggesting that the floor is more solid than the current price range. With lower volume surrounding levels above $20,000, Bitcoin’s rally could be capped at $20,000.
Is it just a bear market rally?
Bitcoin continues to face headwinds including Huge layoffs in the macroeconomic tightening, Gemini and Synessis Legal issues and the prospect of creating a US home Subcommittee Focused on Cryptography.
Additionally, the Bitcoin Relative Strength Index (RSI) is currently showing BTC as overbought. According to the RSI analysis, a sharp downtrend may form with a price correction.
Macro markets are also at key resistance levels. The US Dollar Index (DXY) is at a major support which means that risk assets like Bitcoin may start to see a sell-off if the index recovers. Bitcoin remains correlated with stocks and the SPX mini futures index is also showing signs of decline.
TraderSZ explains below:
BTC dollars – huge resistance here… dxy at major support… ES looks like it could pull back a bit, eth is in the mid-macro range… only been up all week, so can get some profit taking/pullback… It will be my trigger stock if it follows the plan pic.twitter.com/6JziAmBywH
– TraderSZ (@trader1sz) January 12, 2023
With Bitcoin investors taking profits as suggested by TraderSZ, it may be difficult for BTC to reach higher levels.
Historical analysis points to a new bottom for Bitcoin
Bitcoin is currently below the 200-week moving average, and according to independent market analyst Rekt Capital, according to historical data, the price of bitcoin may have already reached the bottom of the macro. Historically, the “death cross” level is seen as low as $23,500.
– Rekt Capital (rektcapital) January 13, 2023
While traders and technical analysis are not known for accurately predicting how long a bull or bear market might last, independent market analyst HornHairs cited historical data from 2015 to estimate how long it would take Bitcoin to reach a new all-time high.
The bull market from 2015 to 2017 lasted 1,064 days, matching the bull market from 2018 to 2021 which lasted the same number of days. If traders matched the bear market that followed between 2017-2018 and 2021 with the current market, it would take 1,001 days for bitcoin to reach a new all-time high.
2018-2021 bull market: 1064 days
2021- *Current * Market Low: 364 days
Days left until the summit if we just copy the cycle timeframe again: 1001 days pic.twitter.com/KoNZxJRuy5
– HornHairs (CryptoHornHairs) January 12, 2023
Despite the current conditions and the strength of the current price breakout, Bitcoin has proven many technical analysts wrong in the past. Risk-averse traders might consider watching increased trading volume at higher prices as an indication of whether Bitcoin is finally back in a bull market.
The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”