The king of cryptos still in shape before the FED! – While next week promises to be lively in terms of macroeconomic events, culminating in the FED meeting next Wednesday, the price of Bitcoin (BTC) continues its momentum from the start of 2023. point that the troubles on the bear side could begin. That being said, let’s not jump to conclusions until we have some major catalysts that the bulls can latch on to for a long time.
Even if the current momentum encourages us to look rather upwards, the bear run of the king of cryptos remains relevant, despite graphic signals going in the direction of bulls. Especially since the reasons for its rebound are essentially based on hopes of a return to normal inflation and reduced fears of a severe recession.
And it is against a market backdrop where we feel the good news is outweighing the bad that we now come to the latest technical analysis of BTC.
Bitcoin in weekly units – Towards the pass of four?
Pulled by the hair, Bitcoin would be on the verge of a fourth consecutive week on the rise. This would allow to calmly validate the crossing of courses beyond the Kijun. At the same time, the Chikou Span is approaching the Tenkan, but still has some work to do to pass the descending line of the bear run.
Despite a rebound from $16,000 to date, the status quo of the price of BTC and the Chikou Span under the Kumo (Ichimoku Cloud) remains valid. So it’s one of the few chart signals that keeps bears afloat. And breaking out of $20,000 (or 2017 ATH) and the falling line would not entirely satisfy the bulls. Hence their pressing desire to see prices rise quickly.
Assuming the rebound continues, Bitcoin would potentially reach $26,000, then would be located near the lower limit of the Kumo, the Senkou Span A (SSA). In condition sine qua non that the market context remains as it has been since the beginning of 2023. On the other hand, if a consolidation were to occur, we will scrutinize the ATH of 2017. The holding or not of the latter will tell us more about the structure of the ongoing rebound.
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Bitcoin in daily units – Prices above $22,000
In daily units, the course of Bitcoin managed to get rid of $ 22,000 at the time of writing, an intermediate level between $20,000 and $26,000. Especially since it is supported by the rebound of the Tenkan and the Kijun. On the other hand, it moves away favorably from the Kumo in the same way as the Chikou Span.
In any case, the probability of a relapse into the alert zone does not seem to be on the short-term agenda. This would allow the bulls to move towards $26,000. And if this market scenario were to gain credibility, the question will be whether we should go through a consolidation phase or not.
If so, we would eventually lay the groundwork for a structurally robust rebound. In this sense, it will be interesting to follow the levels of $22,000 and $20,000 to test their recent polarity shifts from resistance to support. Conversely, the series of consecutive rising weekly candles could continue to the point of initiating panic on the bear side.
Finally, the possibility of a questioning of this bullish scenario would occur from the breakout of $20,000. In which case, we would risk returning towards the levels of the end of last year, not far from $16,000.
In summary, Bitcoin’s bear run since its last ATH in November remains partially under threat from a chart perspective. So much so that we are not seeing a chain of previously high highs and lows, despite encouraging signals. It’s about not selling bear skins too soon. Especially since the expectations of a moderation of the Fed’s monetary policy seem excessive at this stage. Because precisely, inflation is struggling to flow back towards the 2% target.
And although the consolidation of the dollar and bond rates have relieved all risky asset classes for the past few months, their respective trends are structurally bearish so far. So much so that we would not be safe from a new disappointment, which itself would fall at an inopportune moment. With the fear of a scenario that would include a recession accompanied by higher inflation than the average of the 2000s and 2010s, or quite simply the stagflation.
Consequently, the battle won by the bulls at the start of 2023 would not concretely mark the beginning of the troubles on the bear side. And if I put myself in their place, in the days/weeks to come, I would keep a watchful eye on the bond compartment, which historically sets the tone regarding the level of risk aversion.
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