Bitcoin price was on a prolonged downtrend in 2022 as an environment of high interest rates and FTX-related contagion concerns weighed on the broader crypto industry. With the easing of the selling pressure, the crypto has rallied above $19,000 for the first time since early November.
What’s driving the bitcoin price market?
Hopes that the Fed will take a dovish stance in coming months is one of the factors that has boosted BTC/USD in recent weeks. Besides, the market appears to have priced in the bearish factors that affected the crypto in 2022 and that would continue into the new year. Subsequently, the worst appears to be over for the asset.
In the ensuing sessions, bitcoin price may remain subject to curbed gains in the absence of a major catalyst. As it is, investors are eyeing the Fed meeting set for early February for further cues. As was the case in 2022, a hawkish Fed yields risk aversion.
Bitcoin price prediction
BTC/USD has been on a rebound since the beginning of the year. In fact, in the initial two weeks of 2023, the cryptocurrency has risen by about 15%. Notably, it has been in the green in 11 out of the past 13 trading sessions. Subsequently, it is set to record its second consecutive week of gains.
On a four-hour chart, bitcoin price was trading above the 25 and 50-day exponential moving averages. Besides, it is in the overbought territory with an RSI of 81. On the one hand, these indicators, coupled with its movements in recent sessions, point to a bullish trend. Nonetheless, a detailed technical analysis indicates that the crypto is not yet out of the woods.
Bitcoin price has recorded higher highs as highlighted with the red arrow. However, its RSI shows lower highs. This bearish divergence is a sign that the crypto lacks ample strength needed to sustain the bullish momentum.
Based on these technical indicators, I am of the opinion that bitcoin price is at a make-or-break stage. On its daily chart, the 25 and 50-day EMAs have converged at 17,389.56. In that set-up, a death or golden cross could occur and shift the trajectory of BTC/USD. For as long as the crypto remains above 17,389.456, the bulls will have an opportunity to break the resistance at 19,000.
In the short term, the range between 18,415 and 19,200 will be worth watching. A corrective pullback will have the bulls keen on defending the support at 18,000. On the upside, 19,200 and 19,500 will be resistance levels worth watching.