Jump to content

Bitcoin (BTC), New Bull Leg May Be Getting Started

Recommended Posts

Bitcoin heads higher. Is the selling over?

investing-new.pngCryptocurrencyJan 13, 2022 
Bitcoin heads higher. Is the selling over?© Reuters.

By Samuel Indyk

Investing.com – The price of Bitcoin traded above $44,000 on Thursday morning before edging slightly lower to its current price of $43,650. The world’s largest cryptocurrency by market cap has jumped over 10% since trading below $40,000 on Monday morning.

Bitcoin benefitted from the US inflation reading yesterday. The consumer price index increased 7.0% in December from a year earlier, the fastest rate of inflation in almost 40 years.

Although this might have previously weighed on the price of Bitcoin and other riskier assets, cryptocurrency prices increased after the data as markets appeared primed for a higher-than-forecast number.

Some of the components also showed signs of easing. Once again, the increase was driven by shelter prices and used vehicles, but energy prices actually fell in December, the first monthly decline since April.

Some also view Bitcoin as a hedge against inflation due to its limited supply. Only 21 million Bitcoin will ever enter circulation, however, with thousands of coins on the market, it may be hard to argue about the overall limited supply of cryptocurrencies.

Technical Picture

As mentioned previously, a ‘death cross’ looks imminent on the Bitcoin daily chart. A ‘death cross’ occurs when a short-term moving average (the 50-day) drop below a long-term moving average (200-day).

The 50-day moving average is converging on the 200-day with the 50-day at around $48,770 and the 200-day around $48,400.

A ‘death cross’ often signals a bearish trend. The last time the pattern was observed was on 18th June last year. Bitcoin hit a low four days later but prices remained subdued until the end of July.

To the downside, the psychological $40,000 level could continue to act as support after Bitcoin failed to make a clean break below that level on Monday.

To the upside, if Bitcoin manages to hold above $44,000 it would open the door to $45,000. Above that level and the aforementioned 50- and 200-day moving averages could act as resistance.

The next major resistance is seen at the $50,000-$52,000 zone, whereby a break above could signal an end to the bearish trend.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 27/01/23 12:46
  • Posts

    • USDJPY has been regaining ground this week, but inflation differentials and a three-month trend signal the potential for another turn lower Source: Bloomberg      Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 27 January 2023  USDJPY set for third monthly decline The USDJPY pair has been on the slide since its October high, with the historical 147.63 resistance level ultimately marking the end of the dramatic 21-month rally that saw the pair gain almost 50%. Much of that came through a period that saw US inflation soar as Japanese prices remain subdued. That disparity remains, but the direction of travel has certainly shifted as US CPI declines and Japanese price growth gradually ticks up. The overnight 4.3% figure for Tokyo core CPI represents a four-decade high, with the nationwide figures likely to follow on. The chart below highlights how USDJPY has been heavily correlated with the now tightening gap between US and Japanese inflation. However, it is more evident when shifting that inflation differential forward by seven-months. That close correlation highlights the potential for further downside as long as prices continue to trend in a similar manner. Source: ProRealTime Looking at the daily chart, the recent rebound has taken price up towards the top-end of a descending channel and Fibonacci resistance. This highlights the bearish pattern that has been playing out, with lower highs and lower lows in place in recent months. Unless we see price rise through trendline and 134.77 resistance, another turn lower looks likely for this pair. Source: ProRealTime
    • @MongiIG Hi - You recently covered Long NICKEL Trading the Trend and A. Rudolf did this morning but I see it is Closing only. Please clarify, Thanks D600
    • At the expire date IG sell/buy price is 93.8/94.95 and Bloomberg price is 92.12 Assume I bought at 100.0 If I close the trade myself I lose (100-93.8) = 6.2 If the trade expires I lose (94.95-93.8) + (100-92.12) = 1.15 + 7.8 = 9.03 Is that right?    
  • Create New...