The king of cryptos still on its way? – After the slump at the end of last year, the price of Bitcoin (BTC) experienced a spectacular rise in January. So much so that a small patch of blue sky is emerging in favor of the bulls. That being said, the various reasons that explain the awakening of the king of cryptos from $16,000 should encourage caution. Many investors are prematurely anticipating the end of the Fed’s monetary tightening. Which is far from certain according to the last speech of its president Jérôme Powell.
And although the king of cryptos has passed the main macroeconomic events of the week without a hitch, it lacks that little something to get us back on the right side of the fence. Because graphically, the bears have enough to replicate at the right time. Then basically, we couldn’t rely on the Fed’s money printing anymore. By the fact that inflation in the United States would not fall below the 2% target so quickly.
In a market context where we feel a return to normal is looming, let’s now look at the latest technical analysis of BTC.
Bitcoin in Monthly Units – Best January Ever
January’s monthly candle gave the bulls a boost. Not only, from a psychological point of view, it clearly compensates for the losses of the FTX affair. But above all, Bitcoin achieves its best January since its existence via an increase of nearly 40%. However, a swallow does not make spring.
As we speak, the price of BTC is inside the cloud despite the small gap between the two limits that separate it, the Senkou Span A (SSA) and the Senkou Span B (SSB). And head-on, he renews contact with the Tenkan. Even if the latter is still evolving in a downward momentum in monthly units.
In order to ward off the threat of a price position below the Kumo (Ichimoku Cloud), we would need an excellent month of February. In this sense, the king of cryptos will have to get rid of the Tenkan and the $26,000. With the prospect that the return to $30,000 would generate initial stress on the bear side. The only downside is that the Chikou Span could be trapped under the courses.
Bitcoin in weekly units – End of series?
This will be the suspense of the weekend. Indeed, the ongoing weekly doji could signal the end of Bitcoin’s four-week bull run. Provided it closes below $23,746. However, this does not call into question all the progress made since the beginning of the year. And maybea consolidation would be a blessing in disguise, with the objective of building a more solid rebound than the previous ones.
However, we will remain on reserve. Because if the position of the price of BTC compared to Kumo could change in the near future, it is clear that the Chikou Span will take many weeks to get back just inside the cloud. And it is for this main reason that the bears will try to hang on until the end.
In the event of a pass of five, the price of Bitcoin would advance towards the levels tested last August, that is to say close to $26,000. In the event of an extension, it would re-enter the Kumo for the first time since mid-April 2022, possibly returning towards $30,000. And if the bulls were to prevail, we would open the door for the beginning of a neutralization of the bear run.
Conversely, a consolidation would not be shocking after a month of January that exceeded the expectations of many investors. In which case, the bulls having missed the first train, could catch up in the event of a throwback on the $20,000, not far from the Tenkan and the Kijun. On the other hand, the breakout of the ATH in 2017 would eventually signal us that the bears are back in business.
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Bitcoin in daily units – Consider preserving price and Chikou Span above Kumo
In daily units, we observe that the bulls and the bears have not taken major initiatives. Which is only to be expected given the high risk week for both central banks and economic data. But for the past few sessions, Bitcoin has been playing a game of cat and mouse with Tenkan.
In the event of a break in the most volatile Ichimoku curve, the main thing would be to preserve the courses and the Chikou Span above the Kumo at all costs. For that, the bulls would have to manage to defend the $22,000 or the $20,000 as a last resort. And if they meet the appointment, a new key support would be needed after the $16,000 at the end of last year.
Conversely, the bulls risk losing control of the situation. Because they would not have had the necessary arguments to overcome the respective resistances. And not because of the bears which would regain their dominance.
In summary, and somewhat to everyone’s surprise, Bitcoin has not reacted too much up or down to central bank events (FED and ECB) and to the latest US employment figures which have come out clearly in the above expectations. Which would mean at first sight that the rebound at the start of 2023 would not be compromised so far.
However, the hard part remains to be done graphically. On the one hand, the specter of BTC trading below Kumo still looms in monthly units. On the other hand, the return of the king of cryptos inside the cloud in weekly units would not be enough for the bulls to be off the hook for good. And for good reason at the same time, the evolution of the Chikou Span over the next few weeks would hardly invite optimism.
Therefore, in the best case, the bulls could foresee the neutralization of Bitcoin’s bear run since its last ATH in November 2021. This would temporarily rule out a new wave of correction below $16,000. But as far as the probability of a new bull run is concerned, it would take exceptional circumstances, supported by catalysts likely to take the bears on the wrong foot.
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