The neutralization of the bear run on the right track! – Long hesitant and a little in the shadow of Ethereum following the Shanghai update, the price of Bitcoin (BTC) has managed to reach and cross $30,000 since June 2022. A boost that falls steep, and favors the neutralization of its bear run since its last ATH in November 2021. Now, it remains to be seen whether first-order catalysts would allow its imminent end.
The latest technical analyzes could suggest that the king of cryptos has it under his feet. And if inflation in the United States were to run out of steam, a new mood in the financial markets would seriously take shape. However, the current monetary environment does not protect us from an impromptu event. Especially since the injection of liquidity from the FED to meet the difficulties of the banking sector is very temporary.
In a market context that refuses to give in to bad news, let’s review the possible scenarios on the evolution of the price of BTC in the days/weeks to come.
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Bitcoin Dominance – Beware of Spillover Above 49%
Although the total market capitalization of cryptocurrencies has risen above 1000 billion dollars, the dominance of Bitcoin (BTC.D) rebounded from the 49% contact. On the one hand, this would mean that the rebound at the start of the year was mainly driven by the king of cryptos. And on the other hand, it would be premature to speak of a return of the altseason.
Chart-wise in weekly units, prices and the Chikou Span are now above the Kumo (Ichimoku Cloud). This would leave the door open to a continuation of the rebound of the BTC in the event of crossing the 49%. If this psychological barrier were to be broken, we’re not sure if that sends the message of a new bull run.
Fortunately for four consecutive weeks, the dominance of BTC has marked the bottom under 49%. Ethereum’s huge rebound above $2,000 is driving all altcoins up. But wouldn’t it be an enchanted parenthesis before a possible purge?
After leveling off for three consecutive weeks, the price of Bitcoin finds a second wind to rise towards $30,000 and the upper limit of the bullish channel. He settles easily inside the Kumo with a Tenkan and a Kijun who resume their ascent. In parallel, the Chikou Span attempts to successively overflow the descending line and the Kijun. Overall, the bear run neutralization of the King of Cryptos since its last ATH in November 2021 is moving in the direction the bulls would like.
Furthermore, we observe a reduction in the spread between the Senkou Span A (SSA) and the Senkou Span B (SSB) on the future Kumo. A bullish crossover in favor of the first would sound even more the charge of a BTC which would be close to the next resistances. In this context, prices would follow their course in the bullish channel without showing signs of excess on the upside.
Assuming another week of the same caliber, the bulls could target $35,000 to the point that the price of Bitcoin would approach a crossing above the Kumo. Conversely, a failure below $30,000 would only be a pretext for profit taking as long as prices remain inside the bullish channel. The real alert zone that would definitely cause trouble would come under $20,000 or the 2017 ATH.
Bitcoin in daily units – An exit from the bullish channel from the top?
In daily units, the price of Bitcoin is on the verge of overflowing $30,000 and the bullish channel from above. This situation maintains the favorable positions of prices and the Chikou Span compared to the Kumo. Especially since the rebound since April 10 is accompanied by a Tenkan and a Kijun which coordinate on the rise.
Assuming the king of cryptos is still riding this week’s strong momentum, bulls would be in a comfort zone. In effect, the $35,000 would be quite possible in the near future. This would confirm the neutralization of the bear run with the presence of a future Kumo which has continued to rise since last February.
Otherwise, the breakout of the Kijun could momentarily eject the price of BTC below $30,000. In which case, a bearish extension could occur towards $26,000. But it would not threaten the bullish channel and the rebound at the beginning of the year. And it is below $22,000 that the bears could recover.
In summary, Bitcoin is taking another step on its way to neutralizing its bear run since its last ATH in November 2021. However, the big rebound in the crypto king’s dominance might raise some question marks. It could portend a return of tensions in the broader cryptocurrency market.
The other hot spot to watch concerns the evolution of the Fed’s monetary policy in relation to inflation in the United States. If the price of BTC rose from 16,000 to $30,000, it is thanks to the hopes born of a pivot on the part of the American central bank. But as we speak, a 25 basis point rate hike would be on the cards at the next meeting on May 3rd. This would not prevent the king of cryptos from continuing its momentum. Provided that inflationary pressures subside over the next few months.
On the other hand, if inflation came back into play, the Fed would be forced to raise or maintain rates at an extremely high level. In which case, Bitcoin would potentially experience a blow. And we should not give up the $20,000 at the risk that the bulls find themselves in their last entrenchments.
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