The remarkable 2023 spike in Bitcoin (BTC) price appears to be slowing down after tagging $24,474 for the first time since mid-August. BTC is down 2.3% in 24 hours to trade at $22,874 at the time of writing, against a tantalizing backdrop of a 35% return in 30 days. Despite the dip, some experts believe Bitcoin price is on the cusp of a colossal rally likely to be triggered by an incoming golden cross pattern.
Over 620k Small Addresses Pop Back as Bitcoin Price Searches for Support
Investors have continued to flock to crypto markets, BTC included since the beginning of the 2023 rally. According to insights from Santiment, a leading on-chain analytics platform, more than 620k small Bitcoin addresses have over the last six weeks, hopped back onto the protocol – possibly driven by the fear of missing out (FOMO).
Santiment said that most of the addresses “returned on 13 January 2023 when the price regained $20k.” These addresses, with 0.1 BTC or less, experienced stunted growth in 2022, but their activities in 2023 show potential trader optimism.
(2) Santiment on Twitter: ” There have been ~620k small #Bitcoin addresses that have popped back up on the network since #FOMO returned on January 13th when price regained $20k. These 0.1 $BTC or less addresses grew slowly in 2022, but 2023 is showing a return of trader optimism. https://t.co/CUAS0nV23x https://t.co/wo8NBDNXs3″ / Twitter
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator on the daily time frame chart has confirmed a sell signal, implying the lower leg could stretch a little further than what bullish investors are hoping for.
Overhead pressure may continue mounting on Bitcoin price with the MACD line in blue staying below the signal line in red. Traders can ascertain the validity of the uptrend with the general direction of the momentum indicator. Just like the MACD’s consistent movements to the upside reinforced the uptrend in Bitcoin price throughout January, a southbound move would tip the odds in favor of a correction.
The same daily chart shows how Bitcoin price respected the seller congestion slightly above $24,000 in confluence with the falling trendline, as illustrated. If a change of guard takes a long time to materialize, BTC may seek support at the 200-day Exponential Moving Average (EMA) (in purple) around $21,383.
If push comes to shove, Bitcoin price might have to settle for an extended leg down to $20,000, where traders will meet support provided by the 100.-day EMA (in blue). It is worth mentioning that declines below this level could be an overstretch for BTC, especially with Santiment reporting a spike in small addresses.
Can Bitcoin Price Reclaim Highs Above $24k
Bitcoin price still shows it has the potential to push for the resumption of the uptrend, aiming for $24,000 and $30,000, respectively. From the daily time frame chart, we can see the largest cryptocurrency closing in on a golden cross pattern.
Traders spot this pattern as the 50-day EMA (in red) crosses above the longer-term 200-day (EMA). According to Sean Farrell, the head of the digital-asset strategy at Fundstrat, “most instances of a golden cross have resulted in favorable returns for Bitcoin, and many have occurred at critical long-term inflection points.”
History shows Bitcoin price has over the last five years increased by an average of 22% in the sixty days succeeding every golden cross. However, the macro environment now is very different from what the market was experiencing in 2020 and 2021. According to Bloomberg, the ongoing pullback could be a result of central banks tightening key monetary policies to combat inflation.
A report on US jobs last Friday dug holes in the market watchers’ expectations for the Federal Reserve (Fed) to completely take the foot off the gas pedal, and cease such policy tightening.
John Toro, the current head of trading at Independent Reserve, a crypto exchange platform, reckons the uptick in Treasury yields following the payrolls report was a positive trigger in the prices of risker assets like cryptos.
“If it remains true that the bond market continues to be leading for risk assets, the cryptocurrency market may take a breather until risk assets have appropriately repriced for higher yields,” Toro told Bloomberg.
What’s Holding Bitcoin Price from An Immediate Rebound
Bitcoin price is yet to secure support, where bulls would stage the anticipated rebound to $24,000. Moreover, the crypto market may be factoring in the recent hike in interest rates in addition to the US jobs report, which showed the glaring effects of inflation.
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