Bitcoin: The War Against the Downtrend Has Begun
FOMO Is Real! Don’t Buy Into It…Yet.
Bitcoin is experiencing a resurgence and is dragging the whole crypto market with it, climbing more than 12% over the last 7 days. At the time of writing, the apex cryptocurrency is trading at $18,850 after peaking just above $19,000.
After the long lull that saw BTC trapped in a tight range since the end of 2022, we finally have a bullish breakout, which is now challenging the ‘FTX level’. In other words, Bitcoin is now trading at a level close to the FTX-triggered drop that occurred around November 8th of last year.
According to blockchain analytics company Glassnode, roughly 13% of Bitcoin’s supply is now in profit, which suggests that a large number of coins were bought between $16,500 and $18,200. Quoting Glassnode’s Twitter post: “As #Bitcoin rallies to $18.2k, over 13% of the Circulating Supply has returned to profit. The observed sharp move upwards in this metric helps to confirm that a large volume of $BTC was acquired between $16.5k and $18.2k.”
On-chain analytics platform Santiment implied that whales started to buy again in the first part of January. According to them, more than 20K BTC were bought by whales (wallets holding between 1K and 10K BTC) in the said period.
But Bitcoin is not the only one that’s climbing. Ethereum is up 13% in the last 7 days, currently trading at $1,405. Ripple’s XRP is up almost 12% in the same period and the biggest Top 10 gainer is ADA with 21%. MATIC is up 17% and Solana’s SOL (11th-ranked cryptocurrency according to CoinMarketCap) is up a staggering 28%.
Technical Outlook – BTC/USD
With all the buying that’s going on lately, FOMO (Fear Of Missing Out) is starting to take over the market. But the adage “buy low, sell high” should be taken into consideration. Compared to the recent price action, the current Bitcoin price is high. Of course, if we compare it with 2021’s price, it’s low.
But assuming you don’t want to buy and spend time in the red, it may be better to wait for a lower price. Right now, the price is high and I am not saying it can’t go even higher, just that a pullback is possible.
The Daily RSI is deep in overbought territory. The last time it was significantly above its 70 level, the year was 2021… and just look what happened then. Also, the resistance at $18,250 was broken during the current rally, and oftentimes, after a notable S/R break, the price returns to re-test the level.
To sum it up: Bitcoin’s latest push is suggesting that the war against the downtrend has begun and that the first battle has been won. But don’t think that the war is over. The bears will have their reaction and what’s important to see is how strong it is. If $18,250 – $18,000 holds, then BTC is headed for $20,000, which will be the most important battleground for medium-term direction.
