Bitcoin Long/Short-Term On-chain Cost Basis

As concurred by many crypto analysts, Bitcoin price is setting up for a bull market. The bellwether cryptocurrency plunged to $15,000 due to the collapse of Sam Bankman-Fried’s FTX exchange but has since late December recouped all the losses.

With the largest cryptocurrency trading at $22,869 at the time of writing and after reaching a new 2023 high of $23,446, the bottom could be in. Michaël van de Poppe, a popular trader, and crypto analyst shared this sentiment.

(1) Michaël van de Poppe on Twitter: “#Bitcoin dropped to $15.6K due to FTX and is currently trading at $23K. The bottom is in.” / Twitter

How High Can Bitcoin Price Pump?

Bitcoin price has been bullish throughout the first three weeks of the year apart from a few days where it posted minor retracements, allowing more investors to hop on to the ride. The Chinese New Year has always been bullish for BTC but analysts warn that the largest crypto often gives back most of the gains made.

For now, support at $22,000 remains crucial for resuming the uptrend, eyeing $25,000 in the next few days, possibly a week. A bullish impetus from the Moving Average Convergence Divergence (MACD) indicator adds credence to BTC’s growing potential to close the week above the target at $25,000.

BTC/USD daily chart

Traders wishing to take fresh long positions in Bitcoin price need to watch the MACD’s movement above the mean line going forward. In other words, it would be prudent to hold on until investors finish locking profits before triggering the buy orders.

A suitable buy would be as Bitcoin recoils from support at $22,000. If declines stretch further, investors would be looking to make new entries at the 200-day Exponential Moving Average (EMA) (in purple) at $21,088. Continued declines below $20,000 could signify more losses in coming and perhaps the end of the 2023 relief rally.

Evaluating The Bullish Outlook In Bitcoin Price

As the 50-day EMA (in red) crossed above the 200-day EMA (in blue) it becomes apparent that bulls still hold the reins. Therefore, investors could anticipate movement above $23,000, where they are expected to trigger more long positions in BTC to build momentum to the psychological resistance at $25,000. Such a move above $25,000 is unlikely to stop here with gains expected to close in on $30,000 over the next few weeks.

On-chain data backs the uptrend in Bitcoin price, as shared by Glassnode. The leading on-chain analytics platform reckons that “the recent surge in Bitcoin price has resulted in an initial breakout” past three significant cost-basis levels for the first time since the 2018/19 bear market run, as well as the selloff in March 2020 due to the COVID-19 pandemic.

Bitcoin Long/Short-Term On-chain Cost Basis

Glassnode adds that sustaining Bitcoin above these critical levels would be interpreted as constructive. In other words, the bullish outlook in Bitcoin price is believable and investors may keep their confidence intact.

(1) glassnode on Twitter: “The recent surge in #Bitcoin price action has resulted in an initial breakout above all three cost-basis for the first time since the 2018/19 bear market and the March 2020 Covid crisis. A sustained duration above these key psychological levels would be considered constructive.” / Twitter

Michaël van de Poppe agrees that Bitcoin price may resolve the stalemate at $23,000 by falling back to support near $22,000 before rebounding to carry on with the rally. On the bright side, the dip will grant investors “some serious buying opportunities.”

BTC/USD price chart

The recent price action shows that Bitcoin price is “setting up for a new bull market,” according to Rekt Capital, one of the leading crypto analysts. In a tweet to his more than 333k followers, he opined that Bitcoin “needs to reclaim this ~$23400 as support to move higher, otherwise there is a risk of a new Lower High forming relative to the Summer 2022 highs.” As seen on the daily chart, BTC price needs to break and hold above $23,000 to uphold the move to $25,000 and later to $30,0000.

(1) Rekt Capital on Twitter: “#BTC performs a Weekly Close below the ~$23400 This level continues to act as resistance $BTC needs to reclaim this ~$23400 as support to move higher, otherwise there is a risk of a new Lower High forming relative to the Summer 2022 highs #Crypto #Bitcoin” / Twitter

Insight from the IOMAP model by IntoTheBlock (ITB) reveals that many investors are in profit and will be willing to back a rally in Bitcoin price. Apart from the seller congestion between $22,853 and $23,5727 that 834k addresses purchased 450k BTC, Bitcoin price has a clear path to $25,000.

On the downside, Bitcoin price sits above robust support areas suggesting that while a pullback may be necessary for the continuation of the uptrend, it is unlikely to stretch further than $20,000.

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