Bitcoin (BTC) is slowly starting an uptrend after weeks of tight consolidation. Crypto analysts are assessing the possibility of a possible reversal before a bullish cycle is confirmed.
Tone Vays says Bitcoin (BTC) is preparing for a big move
The seasoned crypto analyst predicts that Bitcoin will likely experience a reversal before rising. Vays says Bitcoin is likely to drop over 13% from the current price before a meaningful rally. He based this bearish trend on Bitcoin hitting two-year lows in November. The crypto analyst states that it is unusual behavior for Bitcoin to still be floundering:
The main reason I believe this is because we spent too much time at the $16,000 lows. The way markets bottom is usually because you only have a few hours to buy the perfect bottom price. You don’t have a week to think about getting the perfect low.
According to Vays, entry opportunities for Bitcoin will appear when it capitulates or after confirming a rally. In part of the video, the analyst says the following as position levels:
Either we drop below $15,000 and it’s an incredible buy-bottom opportunity. Or you wait and buy the break above $21,500.
Bitcoin weekly forecast: How does the PPI fit into BTC’s bear market rally?
Fxstreet analyst Akash Girimath touched on possible risk factors for Bitcoin price in his weekly Bitcoin analysis. One of them was the interest level set by the Fed. This is because the two factors that affect the BTC price are borrowing costs and the value of the US dollar. Also, the US Producer Price Index (PPI), released on December 9, came in above the expected 5.9%. In the US, PPI increased by 0.3% monthly and 7.4% annually in November, exceeding expectations. This high figure indicates that the Fed should continue to increase interest rates at an aggressive pace.
As a result, it will strengthen the dollar and increase borrowing costs, both of which are negative for cryptos. Girimath says we may see a small drop in Bitcoin price.
The analyst then mentioned that a drop in the coming days will offer entry opportunities. In this process, Bitcoin’s movements around $ 16,450 will be critical. Saving here in anticipation of a move to $20,000 or $30,000 will yield maximum returns for the sidelined buyers.
Bitcoin needs these for the $30,000 level
Another sign that bitcoin price may recover comes from its mismatch with momentum. Bitcoin price has produced a series of low lows, while the RSI has produced a series of high highs on the contrary. This lack of conformity indicates that the downside momentum is waning. Therefore, this technical formation often leads to a trend reversal. In BTC’s case, the change will be in favor of the bulls.
Since this appearance, the Bitcoin price has increased by 11.80%. This trend should continue to push the major crypto higher until it approaches the 2022 volume Control Point (POC) at $19,089. This is the highest level of traded volume for BTC, making it a formidable hurdle. Breaking this blockade will allow Bitcoin price to target the next targets at the psychological levels of 20,242 and $25,000 and $30,000.
What does on-chain analysis say about Bitcoin?
The bullish outlook technically makes sense for Bitcoin price. But on the other hand, on-chain metrics suggest a similar outlook. IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that there are two major hurdles for BTC.
$20,242 is a key resistance level with the “Out of Money” of roughly 5.2 million addresses that bought 2.56 million BTC. Therefore, a BTC price rally to this level is likely to see a massive increase in selling pressure as some of these investors have decided to dump their holdings to go head-to-head. Therefore, the technical outlook mentions that a change at $20,242 will pave the way for the bulls to propel the upwards towards $30,000 or higher.
While the technical outlook is optimistic for BTC price, traders should watch out for $15,551. If the Bitcoin price drops, that will be to collect liquidity. A quick recovery after this move can be considered as smart money accumulation. However, a three-day candle close below $15.551 will invalidate the bullish thesis.
In this case, Bitcoin could revisit potential macro lows from $13,575 to $11,898. Interestingly, the immediate support level seen on GIOM extends from $16,622 to $9,735. A shift towards the 12,750 region would be an opportune moment for these investors to put more on their hands. It will add confidence to the possibility that this will provide a bottom for the market. As you follow on Kriptokoin.com, Bitcoin is preparing to close the day above $ 17,000.
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