A Bullish Bitcoin Scenario?

A Bullish Bitcoin Scenario? The crypto market has been a moribund for the past few days. After a severe correction in recent weeks, Bitcoin is stagnating in a range of around $20,000. So what next for the king asset of the market? Is a new pump possible in the next few days?

Repeated testing of the $18,500 level.

The last few weeks have been rather boring in the Bitcoin market. The price oscillates in a range and each gain is followed by a correction that erases them in no time. Since June 13 and a red day that had Bitcoin lose 15%, it has been trading between $17,600 and $25,000.

However, optimism is in order for some observers. Some believe that a bottom may have been found in the $18,500 area. Indeed, in recent days we observe that the price has rebounded several times in this area to then start better. This level, therefore, serves for the time being effective support for Bitcoin.

If we expand our observation on a longer time scale, we observe that this had already been the case in early July or in mid-September.

The price of Bitcoin over the last 3 months with this major support around $18,500

Moreover, apart from two somewhat violent wicks that touched $17,000 on June 17 and 18, the price has never fallen below this support. However, you have to be careful. Indeed, we know that the more an asset is tested, the more likely it is to yield.

A psychological level and importance.

This level not far from 20,000 dollars is also psychological. There is strong buying pressure and it is firmly defended for the time being. If we place ourselves on a monthly time scale, we also observe that this level corresponds to the peak of the previous bull run. It is therefore anything but a trivial price level.

The loss of this support could lead to another severe fall for Bitcoin.
We, therefore, observe that many institutional investors in particular are massively buying Bitcoin in this price range. Remember that this seems to represent a good deal if Bitcoin manages to regain its ATH at more than $68,000.

Recently, there has also been a strong exodus of BTC from exchanges. However, this kind of movement is generally bullish. Indeed, it testifies to a desire to hodl rather than to sell on the part of investors.

Bitcoin still a victim of macroeconomic conditions.

All these elements, as encouraging as they are, should not make us lose sight of the general context. And the latter is complicated, to say the least. Macroeconomic conditions remain severely deteriorated. Moreover, this could last several more months if we rely in particular on the declarations of the FED and market analysts.

According to them, the rise in interest rates initiated by the FED should continue until at least the middle of 2023. This pressure is pushing the equity markets down and in their wake the crypto market.

The S&P 500, which includes the 500 largest US capitalizations, a true barometer of the equity market, still had a rather positive week. Indeed, it is up by almost 4% since Monday and achieves performances that we had not seen since the beginning of September.

However, the medium-term trend remains clearly bearish. Since January 1, the US index has fallen by more than 21%. Moreover, many observers are expecting a new correction for the end of the year.

The sharp correction of the S&P 500 since the beginning of the year

Also, it is difficult to imagine Bitcoin extricating itself from the ambient doldrums. Remember that even today, the crypto market remains strongly correlated to traditional markets.

Bitcoin will initially need to show signs of buying strength. It could thus exceed and settle permanently above $20,000. Also, if it manages to resume its forward march, it will have major resistance above its head at the $25,000 area.

The latter has already pushed the price down many times. It could therefore thwart BTC's plans in the short or medium term.