Looks like high tide is back on the Bitcoin, after the strong retreats of the previous weeks, surpassing the $21.000 level who hadn't seen each other since the Ftx failure unleashed the domino effect on the sector.
Cryptocurrencies, as we know, have ups and downs like tides, sometimes not supported by fundamentals. And then the analysts are uncertain on future of the currency. But, relying at least on technical analysis, there are actually resistances that have jumped like pins and significant levels that have been exceeded in a big way, so much so that it becomes legitimate to hypothesize a rally to new levels.
Bitcoin: What happened in the last few weeks?
The price of Bitcoin in dollars in the last few hours has exceeded the psychological level of 20.000 dollars, reaching a peak last night in Europe at 21,30 dollars, levels not seen since the first days of November, when the Ftx case broke out. This morning it was $21.173,30, up 0,24%.
As you recall, just at the beginning of November the thirty-year-old Sam Bankman Fried , Sbf for friends, filed for Chapter 11 filing bankruptcy of his Ftx. Due to this, Sbf he has to answer for 8 counts and is currently under house arrest awaiting trial.
From that moment for the Bicoin it was a continuous decline, until the other breaks through psychological threshold of $16.000: is the result ofDomino effect after the first Ftx tile falls. Since then has come the failure of other actors, including BlockFi and Voyager, while others have been forced to block customer withdrawals, such as Genesis. Meanwhile, the whole sector has begun to tighten up on layoffs. Just in recent days Crypto.com announced the 20% cut in the workforce, a percentage in line with that of Coinbase.
But since the beginning of the year, something clicked and the currency has started to recover. A signal of an upward trend, the technical analysts have begun to signal it with the overcoming of the crucial resistance of 16.785 dollars which was followed closely by the breakthrough of the one at 16.950 dollars. The rise of Bitcoin is calculated at a 12,34% in the last 5 days and at a 26,17% in the last month.
Flash in the pan or real rally?
The analysts' question now is: is it just a technical rebound, due to coverings, or is there room for further growth? And, if anything, thanks to what?
There are also on the net some surveys among investors. This it is one of the most regarded in the sector, but the outcome tells us little: it shows investors almost equally divided on the outlook.
“It is a good sign within a phase that remains uncertain” said Orlando Merone, Italy country manager of Bitpanda. Some other analysts are more dubious and see another downturn possible.
“Volatility remains, with moves of several hundred dollars on hourly timeframes,” says one. Analyst Tedtalksmacro describes a dip below $21.000 as a "hunt for liquidity."
Looking for foundations
In addition to technical analysis, what else can the crypto trend be linked to? On the one hand, sector experts say, it is moving in the wave of more traditional tech market, driven in turn by the general idea that the US Federal Reserve may be close to interrupting the monetary tightening. Naturally the attention in this period goes to US quarterly arrivals, their earnings and more generally the economic outlook, including a possible recession.
“In a market as volatile as the crypto market, one strategy is to “take the money and run” by seizing the opportunity when it presents itself” says one of them who cites the so-called “fomo”, fear of missing out, that is, the fear of missing out on an opportunity.
The rise of cryptocurrencies was also favored by theweakening of the dollar with the dollar index dropping from 113 to 102 points in recent weeks, leaving room for recovery for risk-on assets, those that give appetite for risk, analysts say. Cryptocurrencies, which incorporate projects that invest in web3, blockchain and metaverses, are considered by investors as speculative assets, with high potential growth but also high risk.
In any case, it cannot be said that things have settled down until we have clearer ideas regarding the position of Genesis and other companies still in the balance.
