Bitcoin at $23,000, Has a New Bull Market Started?
The cryptocurrency market appears to have put the Genesis bankruptcy behind it and has recovered in recent days, with Bitcoin recovering $23,000 for the first time in five months. Prices of the leading digital currency have now returned to where they were before the FTX default in November, triggering the latest of several 2022 shocks to the cryptocurrency market.
Bitcoin New Bull Market
Bitcoin’s trajectory matched that of stocks in these first weeks of 2023 as well, following the consolidation of a very strong correlation between the two types of assets last year. “Bitcoin has a strong positive correlation with risk appetite factors and it has increased as equity markets have rallied further,” said Naeem Aslam, analyst at AvaTrade. This means that the macroeconomic environment conditions the development of risky assets. Falling inflation and the prospect of central banks loosening their grip on interest rate increases boosted investor confidence, which increased their exposure. As a result, Bitcoin is up more than 30% in two weeks.
Bitcoin: what to expect now?
Everyone is now wondering if the biggest cryptocurrency has finally turned around and entered a bull market. Aslam warns that some cracks in the rally are starting to show and traders “may stop betting on riskier assets this week”. Among other things, notes the expert, “comments from Federal Reserve officials indicated that the central bank does not appear to be in a hurry to end its ultra-aggressive monetary policy.”
More optimistic is Alex Kuptsikevich, an analyst at broker FxPro, who says that technical levels of market analysis indicate the strength of the cryptocurrency. “Bitcoin has started a new bull market and is heading towards $24,800, where the psychologically important 200-week moving average and the 161.8% Fibonacci momentum level from the December lows are concentrated,” he declared.
Of the same opinion is Yuya Hasegawa, an analyst at the Bitbank exchange, who notes that Bitcoin trend indicators point to a strong uptrend. “Price appears to be targeting the August high of $25,200,” he said. However, the expert sees a downside as Bitcoin’s Relative Strength Index (RSI) starts to decline. “This is not a good sign for the current price trend,” Hasegawa pointed out. “Bitcoin could test its August high and receive support at the $20K/$21K level, but with the RSI divergence and some Big Tech quarterly gains coming this week, it could get quite choppy,” he said.
But even if Bitcoin approaches $25,000, it would be difficult for Kuptsikevich and Hasegawa to reach $30,000 any time soon, which many traders see today. This would be a key threshold to test, as the post-implosion liquidation of the TerraUSD stablecoin started there, which was followed by chain failures from various crypto industry players. “The market may need a long recharge and consolidation before a new wave of bulls starts,” said Kuptsikevich.