BTC/USD – Retest of Broken Level or Flawless move to $49,000?
After spending 8 days in a very tight range below $45,000, the Digital Gold – Bitcoin – has jumped above this key resistance and is currently trading at $46,200. We’ve talked many times about the possible/probable drop that followed the spot Bitcoin ETF approval by the U.S. Securities and Exchange Commission (SEC) but also about the fact that big players were probably buying the dip.
After momentarily reaching $49,000, Bitcoin dropped into the $38,500 area when the ETFs were approved. Grayscale, one of the approved funds, transferred massive amounts of BTC to Coinbase. Usually, when whales send their coins to exchanges, it means they want to sell them (when they are holding on to their coins, they are keeping them in their own wallets). This proved true once again and Grayscale sold massive amounts of Bitcoin, which sent prices below $39,000.
At that lower price, dollar signs probably flashed before the eyes of the “big boys” and they started to buy the dip. The result is Bitcoin’s newest rally, which is now at $46,200 but it doesn’t look like it will stop here.
The Online Vibe
Analyst Markus Thielen predicts the current move to extend into the $48,000 area and he is building this forecast on the past behavior of Bitcoin around the Chinese New Year. According to him, in the past 9 years when traders acquired Bitcoin before the Chinese New Year (February 10), the price often increased by more than 10%.
Adding to the bullish predictions, Arthur Hayes, the former CEO of the crypto exchange Bitmex, sees Bitcoin climbing to $1 million. He founded this extremely bold prediction mainly on the recent U.S. banking sector crisis, more precisely the New York Community Bancorp (NYCB) debacle. The bank announced a $252 million quarterly loss, which prompted rating agency Moody to drop its rating to “junk” status. Hayes predicts a government bailout of NYCB, followed by a frenzy of money printing.
His candid take on X was “Oh baby … From junk to bankrupt, that’s the future. And then more money printer go brrrr. $BTC = $1mm.” I guess we will have to wait and see if his prediction comes true. I wouldn’t hold my breath, though…
Chart Analysis – BTC/USD
We have a long way to go until we get to 1 mil so in the meantime, it’s better to focus on where the price is going in the much shorter run. The bullish sign is that we have three green candles that are showing strong momentum. The candles are relatively big, with very small wicks and they blew past $45,000 which is a very important level.
Oftentimes after a break of a major level, the price returns to retest it; other times it just flies past and never looks back. The most important target right now is the top at $49,000 but probably Bitcoin will not go there in a straight line (consolidations and retracements may occur). The way the price behaves when/if it gets there will tell us what the next move is. A return below $45,000 would invalidate or postpone this scenario.