2023/02/27 (179.042) Technical Analysis

BITCOIN Is Currently Trading Above 22875 BTC
This Price Action Area Need To Be Defend To Rise Further

Bitcoin continues its descent towards $22,000

The thinner economic calendar this week could relieve the price development.
Bitcoin (BTC) price cannot count on Monday’s headlines that a breakthrough has been achieved in Brexit negotiations. Markets are more likely to continue their sell-off, which ended on Friday as the official trading week ended. Given the rather light economic calendar this week, markets are likely to move sideways and not make any big waves, either up or down.

There is a big question mark behind the bitcoin price which could pose a problem this week
Bitcoin price recouped much of last week’s sell-off after Saturday’s price action was flat. On Sunday, the bulls finally managed to push the price up over 1.5%. Multiple headlines emerged in ASIA-PAC trading on Monday that a Brexit deal is on the table. Markets are unfazed as the deal has yet to pass the House of Commons and the Democratic Unionist Party (DUP) has not yet issued a statement on whether it will support it.

BTC faces a week full of Brexit headlines and a rather thin economic calendar. However, traders should be aware that the markets are facing an oversupply wave as the European Central Bank (ECB) is about to start selling its portfolio. Expect risky assets to be on the decline with BTC falling 7% towards $21,969 to find key support. Risk assets could book some gains in the meantime given the rather light economic calendar this week. A major reversal towards $23,878 would prompt more bulls to buy into the price action. While a breakout seems possible, don’t expect an attack on last week’s triple top at $25,246.

Setback for all Bitcoin investors
After BTC/USD had repeatedly tried in vain to break through the $25,000 mark, there was now a significant sell-off.
At the time of publication, the Bitcoin price was around $23,000. That’s a correction of 8 percent in a short period of time.

How is the Bitcoin course going now?Because the US stock market is slipping – & the Bitcoin course followed!

In the following I will try to explain to you what the causes of the reset are and whether now is a good time to buy BTC cheaper. A look at the latest news and forecasts for the Bitcoin price 2023. Not only cryptocurrencies are currently on the decline. Yesterday, Friday, the most important American stock indices Dow Jones, Nasdaq and S&P 500 also recorded significant sell-offs. With a drop of between 1 and 1.7 percent, the daily losses were higher than they had been for a long time and, given the usually lower volatility compared to Bitcoin & Co., very high.

There are several reasons for the decline. Above all, investors are worried that the US Federal Reserve could raise interest rates for longer and more than was recently expected. This is supported by the fact that US consumer spending rose unusually sharply in January 2023. The price index for personal consumer spending rose by 0.6 percent in January and was thus significantly stronger than analysts had expected. In December 2022, the increase was only 0.2 percent.

Bitcoin back to $20,000 soon?
I don’t know it! Stay optimistic above $20,000 though…

If the sell-off of the last few days continues, Bitcoin could also test the support at $20,000 again. Some analysts already consider such a scenario to be likely. Then it has to prove that the bulls are actually strong enough to defend this level again. If this support falls as well, bitcoin price could quickly find itself in the $17,000-$19,000 price range where BTC/USD had been consolidating for quite some time in 2022. If more black swan events are added, comparable to the collapse of crypto exchange FTX last year, it is even possible that BTC will retest the lows of $15,500 and maybe even make a new low. However, such a bearish scenario could shatter hopes that we are already at the beginning of a new bull market and that the worst is over. Then the surge at the beginning of the year would turn out to be nothing more than a bear market rally that lured investors into long positions on crypto exchanges, only to subsequently liquidate them.

Analysts worry about inflation
Other figures are also making investors frown. US consumer spending in January was also higher than expected, climbing 1.8 percent. However, the analysts’ forecast was only 1.3 percent and was thus clearly missed. This data could be a sign that the battle against rising inflation in the US is far from over. It seems that the central bank’s rate hikes so far are not enough to get inflation under control. Recently, the US inflation data could no longer meet the expectations of analysts. In January 2023, the inflation rate fell by only 0.1 percent, while analysts had planned a decline of 0.3 percent. Nevertheless, the prices on the crypto and stock markets initially continued to rise.Positive trend over: should the central bank act now?
The euphoria was obviously still great that it could only be a flash in the pan and that the overall decline in inflation since the record levels in summer 2022 is continuing. The Fed had also nurtured hopes that the tough interest rate policy of 2022 was nearing an end. The interest rate hike last amounted to just 0.25 percent. That was the second decline in a row. As early as December 2022, there were signs of relaxation with an increase of 0.5 percent, after the interest rate hikes had even been as high as 0.75 percent several times in the previous months. Perhaps the central bank put on the brakes too quickly. The analyst Phil Blancato from Ladenburg Thalmann Asset Management also sees it that way, as he explained to the Handelsblatt. The current development “clearly indicates that the Fed still has more to do,” according to the expert.

Forecast calls for a 0.5 percent interest rate hike in March
This makes it more and more likely that the Fed will raise rates even more sharply – by 0.5 percent – at its next meeting in March. The hope that the interest rate hikes will soon be over or that interest rate cuts are even possible again, as some analysts had recently predicted, would thus be destroyed. An increase of 0.5 percent would be stronger than last and mark a trend reversal. At the same time, it would be seen as an admission by the central bank that far greater efforts are needed to bring the inflation rate back into the target corridor of 2 percent. Recently, voices have been raised that the Fed will even have to raise the key interest rate to more than 6 percent. It is currently at 4.75 percent. That leaves room for 2-3 more major adjustments over the next few months. There is a risk that the recovery in the crypto market is now coming to an end. After last year saw sharp corrections, with BTC/USD falling to lows of $15,500, buyers of Bitcoin and other cryptocurrencies saw an explosive rally to start the year. BTC gained more than 50 percent and some altcoins even recorded price jumps of 100 percent and more.

Analysts remain bullish on BTC
However, the time has not yet come and the Bitcoin price forecast by analysts for 2023 is largely bullish. Digital Coin Price estimates that BTC/USD can still reach prices of more than $46,000 this year. That would be a 100 percent increase from current levels. Coin Price Forecast is more cautious and expects a maximum price of just under $29,000 this year. The financial blog changelly.com places itself between the other forecasts with a maximum estimate of around $39,000. Wallet Investor, on the other hand, is extremely bearish. Analysts see Bitcoin falling below $10,000.