For the first time since the beginning of the year, the bitcoin price seems to have lost its bullish momentum and presented a bearish weekly bar after reaching $24k and closing below $23k.
Short-term holders and bitcoin miners have been observed taking profits in recent weeks after a year-long laborious bear market. Nevertheless, long-term holders continued to stockpile more coins, as reported by on-chain intelligence platform Glassnode.
According to market data provided by Binance-backed Coinmarketcap, the price of bitcoin traded around $22,890 on Tuesday, up about 35 percent over the past 30 days. The relief rally could be undone if bearish sentiment continues in the coming weeks, pushing the asset toward the next strong support of around $18,000.
A similar narrative was reiterated by Yuya Hasegawa, crypto-currency market analyst at Japanese bitcoin exchange Bitbank, who noted that high-impact news can already be factored into current prices. Notably, the U.S. raised its federal interest rates by 25 basis points, as expected. In addition, the Labor Department reported the largest increase in nonfarm payrolls, 517,000 for the month of January, well above the 187,000 Dow Jones estimate.
“Bitcoin survived a week filled with important events and economic data while holding the price around $23,000, but the market may have run out of reasons to buy the coin and may be subject to profit-taking sell orders this week“, Hasegawa noted.
According to Noelle Acheson, an economist and editor of the Crypto is Macro Now newsletter, the possibility of slow market growth in 2023 should be a factor that crypto traders should consider. In addition, most economists believe that there will soon be a recession if economic growth is not slow.
“Expectations are shifting to more tightening, and higher rates for longer (which is what the Fed has been saying all along), which is not good for risk assets“, noted Acheson.
Let’s take a closer look at bitcoin’s price action
The bitcoin price has yet to give any clear technical information about the next trend, despite rising 6% over the past week. According to a popular crypto analyst on Twitter Inc called Rekt Capital, Bitcoin traders should not conclude that the last trend is over or that a new trend is forming. As such, the analyst believes that the next few weeks will be decisive for the outlook of the next quarter.
Some initial, small #BTC rejection from around the ~$23400 level but no conclusive technical moves just yet
– Rekt Capital (@rektcapital) February 6, 2023
If bitcoin bulls regain momentum in the coming weeks, analysts predict that $30k will be the next landing position. As a result, the altcoin market, which precedes bitcoin historically, could post more gains. Otherwise, a capitulation from current levels could push bitcoin’s price below $18,000 and perhaps retest $15.5k.