After a strong consolidation stint above and around $30,000, Bitcoin lost its psychological range. We analyzed a clear direction for Bitcoin after its Bollinger Band widens, and as expected, corrections are in place. At press time, recovery is extremely limp as the FOMC interest rates hike did little to move the needle. However, in this article, our objective will remain to zoom out and take an optimistic perspective.
Also Read: Why Bitcoin Failed as Inflation but Not as Debasement Hedge
Bitcoin: Where it all started in November 2022
While the subheading sounds dramatic, the reference is in context to the beginning of the current bull run. On Nov. 21, 2022, Bitcoin dropped to a low of $15476. “BTC to $12000” speculations started to flood in but the asset managed to turn the tides. A strong recovery above $20,000 by January 2023 exuded confidence, and since then, it has been steady progress.
Unsurprisingly, Bitcoin’s bullish breakout in 2023 also faced bouts of price pullbacks. Let us break down the rally into bull and bear periods. Since November 2022, the asset has registered three periods of recovery, and three corrections phases(the 3rd one being currently active). Now, in each of those corrections, the bounce back has taken place perfectly from the Fibonacci Range of 0.5-0.618.
After reaching ~$25,000 in February 2023, BTC dropped down to $19549, marking the first correction zone between $19209-$20363 (0.50-0.618 Fibonacci lines). By 2nd week of April, BTC reached $30,000, followed by another drop down to $24840 by June. Again between 0.5-0.618 Fibonacci range. At press time, Bitcoin is currently under correction from this 3rd recovery of the bull cycle. Now, concerning historical behavior in 2023, the asset is most likely to rally upwards from or between $27475-$28302. It will mark the end of BTC’s 3rd correction phase, before undertaking another bullish narrative.
No ‘Pressure’ on BTC
With Bitcoin looking shaky at the top, some of the industry proponents continue to hold a bullish stance. Ki-Young Ju, Co-founder of Cryptoquant highlighted that approximately 71% of the realized BTC cap has not moved, which is older than the 6 months of holding. According to him, it is indicative that long-term holders are not contributing to any selling pressure, which reduces the possibility of a prolonged drawdown.
Also Read: This ‘Bitcoin Fund Rate Strategy’ Has High Accuracy
