Leading the 2023 rally of the cryptocurrency market is Bitcoin, the so-called king of crypto. At the time of writing, BTC is changing hands at $23,742 which allows the alpha coin to reach the August 2022 support level of $22,722. This made crypto Twitter abuzz with excitement analyst went full bullish on BTC with some setting ridiculous targets like $1.3 million at the end of the year.
However, there are analysts who are very cautious about this rally. The fear, uncertainty, and doubt surrounding Bitcoin today is how this rally can be seen as a bull trap which could potentially set many long position holders up for losses in the medium to long term.
But with strong bullish momentum, BTC may still have enough room to push towards $25,000.
$BTC should reach 1.3m this December. I got this number by using the average January gain of 42% per month.
Will come back around then take profits. Math is easy pic.twitter.com/6c3CZ3r7n8
—Pentoshi 🐧 (@Pentoshi1) January 26, 2023
Short Positions Decimated By Previous Market Movements
CoinGlass data shows that a total of $29.64 million short positions were liquidated between all exchanges as Bitcoin broke through $23k. This may seem insignificant compared to the January 14 liquidation of short positions worth $141 million, but the liquidation may force some bears to go long as Bitcoin continues to rise.
At the time of writing, the crypto king is up 42%, according to it Coingecko. This can continue as macroeconomics that adds up a bit.
At $23.7K, Can Bulls Push Bitcoin Price To $25K?
In the short to medium term, top coins may suffer as bullish momentum slows. At the time of writing, January 30, the BTC bulls seem tired. If this slow momentum continues, the coin could return to the current support at $22,622. This support should be able to withstand strong bear momentum once it reaches that point.
Investors and traders should also watch stock movements. It comes from the International Monetary Fund 2022 learn between crypto’s relationship with stocks showing a strong correlation between the two asset classes. As of the time of writing, major tech stocks like Apple and AMD have strong ties to Bitcoin.
BTC total market cap at $456 billion on the daily chart | Chart: TradingView.com
Indices like the S&P 500 and the Dow Jones, however, have a lower correlation. But the relationship between Bitcoin and stocks makes BTC vulnerable to macroeconomic distress. With corporate investors skeptical despite the market rally that started this year, Bitcoin may experience some volatility in February.
Currently, $25k seems to be the medium to long term target for Bitcoin bulls. The combination of gains and securing current coin support will allow investors and traders to finally reach and potentially break the $25k resistance.
Peter Brandt, a veteran trader and market analyst, predicts that Bitcoin will encounter significant resistance at $25,000 in March, with a retest of the $18,000 level.
If the bulls maintain this level, analysts expect another big advance that could push the price of Bitcoin closer to $35,000 by July 2023.
Featured image from Wired