Bitcoin has finally breached the psychologically relevant $20,000 price level after a hiatus of over two months, as the world’s premier cryptocurrency appears to have finally overcome the fears of contagion in the aftermath of FTX’s spectacular fall from grace. Even so, the wider crypto community remains split as to whether the current price action constitutes a cyclical bottom for Bitcoin or just an aberrant upward thrust.
Can you believe that it might be finally happening on Sunday night after a 13 month wait?👀https://t.co/3upjcUUeql pic.twitter.com/VPyeOR1Zi4 — Matthew Hyland (@MatthewHyland_) January 14, 2023 Let’s start with factors that appear to bolster the bullish case. Mathew Hyland has garnered quite a lot of fame in the crypto circles for his excellent interpretation of Bitcoin’s 3-day supertrend indicator. As is evident from the tweet above, the indicator is on the verge of flipping green after a 13-month excruciating period. Once triggered, this signal has a fairly robust track record of predicting ensuing momentum. Additionally, Bitcoin’s RSI has now entered bullish territory after a hiatus of 13 months.
Plotting them from 2017 top to 2019 bottom & looking at the extensions: Most recent extension landed right at current cycle bottom and next extension is the same amount of days from bottom to top as last cycles pic.twitter.com/ce5LnQJ216 — HornHairs 🌊 (@CryptoHornHairs) January 14, 2023 Moreover, as per the tabulation by the Twitter account @CryptoHornHairs, the Fibonacci-based extrapolation of bullish and bearish periods just started flashing the proverbial green signal.
5 months of bull ahead, imo pic.twitter.com/euBIMD286B — HornHairs 🌊 (@CryptoHornHairs) January 14, 2023 Critically, based on the monthly RSI indicator’s bearish divergence for Tether (see the above tweet), Bitcoin is predicted to experience a 5-month bullish momentum, at the very least. As a refresher, a fall in stablecoins’ market cap is generally considered a bullish factor for cryptocurrencies as it suggests re-invigorated risk-taking behavior across the crypto sphere. The correlation of Bitcoin with the Nasdaq 100 index seems to have rebounded and is currently hovering at around 90 percent. Given that the US stocks have been rallying recently on the back of revived Fed pivot bets as the inflationary pressures assailing the US economy continue to moderate, this elevated correlation regime is currently acting as a potent tailwind for Bitcoin.
Please continue to FUD crypto! 🙏 https://t.co/pDkk1BnfAr — CZ 🔶 Binance (@cz_binance) January 14, 2023 Finally, the current bullish phase started as soon as Jim Cramer tuned bearish on Bitcoin and other cryptocurrencies, inviting the dreaded Cramer Curse. Of course, we noted in our previous post that Bitcoin was likely to bottom out in Q1 2023. However, given the still-nebulous nature of this evolving bullish phase, it is hardly surprising that the crypto community itself remains split on this “all-clear” bullish prognostication, as illustrated in the Twitter poll above. After all, the Federal Reserve has been adamant in repeatedly declaring that it will not pivot toward a more accommodative monetary policy in 2023, a position that increases the prospects of a recession in the US. Additionally, if Bitcoin has already bottomed out in this cycle, it would mean that the world’s premier cryptocurrency endured a shallower downturn as compared to an average drawdown of 84.5 percent that Bitcoin typically experiences relative to its preceding all-time high – a level that corresponds to a price of around $11,000. Given the headwinds that still persist, a shallower bearish cycle does not engender quite a lot of confidence at this stage. Do you think Bitcoin has already bottomed out? Let us know your thoughts in the comments section below.
