Following Long Consolidation, BTC Now Facing Huge Resistance: Bitcoin Price Analysis
While the price of bitcoin consolidates inside a narrow range with little volatility, it nonetheless exhibits slight daily changes. BTC is expected to revisit lower price levels if a rejection occurs at the current price, which is testing a key resistance area. A breakthrough, though, may trigger a brief surge.
Technical Analysis
The Daily Chart
Over the past few months, Bitcoin has been unable to maintain a price above the 50-day and 100-day moving averages. The price most recently fell below the 50-day moving average at $18K, and it has since dropped. But it makes another effort to cross above the 50-day moving average.
Despite the 50-day MA’s persistent resistance, the price trend is not encouraging because overall demand and activity are at low levels. Before the market starts to rise in a positive direction, the participants’ trust must be restored.
We might discuss the MACD indicator in this regard: This indicator is set to turn green, indicating a first short-term bullish sign that might help BTC surpass the 50-day moving average.
4 hour chart
The next 4-hour period chart shows the lack of activity and low volatility more clearly at the moment. The price has recovered from the $16K level after experiencing a protracted downturn and is currently stabilizing below the $17K level. The primary battle for Bitcoin is now, however, moving past this convergence zone.
If the price moves back above the stated level, the broken trendline and a pullback to the 0.618 Fib level will be the primary obstacles to the $18K zone.
Will BTC volatility continue in 2023?
In November 2022, with the demise of the FTX cryptocurrency exchange, the price of Bitcoin fell to levels not seen in two years. BTC has seen some gains in 2023, but they are still distant from the $69,000 it reached in November 2021.
AJ Bell’s head of investment analysis Laith Khalaf noted that despite the current bear market, investors in Bitcoin have had the biggest returns over the previous ten years, with a £1,000 investment in 2013 increasing to nearly £1.6m today.
The number of Bitcoin enthusiasts who have realized the entire ten-year return is likely as tiny as that number is high, according to Khalaf, so those who have steered clear of the crypto frenzy should take solace in that fact.
“Ten years ago, Bitcoin wasn’t widely used, and even the very first cryptocurrency investors would have had to watch their investment double in value 12 times until it peaked in 2021, without cashing in any gains, in order to reap the entire ten-year return. Additionally, since their investment declined by 73% in 2018, they would have had to passively watch and refrain from pressing the extreme panic button, he
Continued.
Viktor Prokopenya, the founder of VP Capital, added that investors who are patient and can tolerate the natural market volatility are rewarded in the cryptocurrency markets.
“Of course, I’ve seen similar volatility in action before as a pioneer in the cryptocurrency space. Bitcoin’s value dropped from $20,000 to $3,000 in 2017, according to Prokopenya in an interview with Crypto Investor.
“It’s critical to realize that volatility is likely to persist and that the macroeconomic environment will continue to be difficult. No cavalry is approaching to spearhead a V-shaped recovery“.
Novogratz thought the community would remain strong and that cryptocurrencies would not vanish. He did, however, add:
“This does not imply that the cryptocurrency market will bottom and rise immediately. Restructuring, a redemption cycle, consolidation, and restored faith in cryptocurrency are required. Crypto moves in cycles, and we recently saw a significant one“.
On-chain Analysis
The following graph displays the price of Bitcoin together with the Miner to Exchange Flow metric’s 14-day moving average line. The entire quantity of coins that have been sent from miners to exchanges is represented by this measure.
A spike in the indicator suggests that miners may be under pressure to sell in order to recoup their costs during the market’s negative phase. The price decreased noticeably after each spike in the measure, as shown in the graph.
The indicator, however, just fell and hit a new multi-year low. This demonstrates that the selling pressure from miners has decreased, which may be seen as a positive development for the price given that miners make up a significant portion of the market.
