BTC Market Update

As of last week’s price analysis, we’ve since watched the battle of the bears & bulls, while it’s also been a week of stiff competition between both the Superbowl’s Chief’s and 49’ers, we’ve also witnessed a supercharged and energetic Crypto market.

Fueled between the prospects of a potential Federal Reserve pivot on its current monetary policy stance and the Bitcoin halving fast approaching in April of this year, its little surprise we’re seeing crypto-currency mania start to slowly creep back into a the mainstream consensus. BTC has seen a robust bounce off of the $38,400 monthly support, maintaining its local trend and in true Bitcoin nature, defying market expectations of a deeper correction for the time being. As BTC last week closed the week out with a near 14% gain in a single week, it’s taken us from $42,571 to $48,316 – a near $6000 USD upwards surge by the week’s end.

However, there are always two sides to the same ‘digital’ coin (pardon the pun!). If we have a look at the market-wide sentiment metrics, it’s clear that the recent surge has spurred on a decent amount of euphoria that comes along with such monstrous gains in a short span of time.

Upon looking at the Fear & Greed Index, it’s apparent that the market is buying all into this rally both financially and emotionally, ergo; creating a vacuum for which any less-than-stellar “Fear, uncertainty or doubt” (also known as FUD) can put a damper on this parade and send price looking for more solid support down below @ $30,000 as previously mentioned in last week’s review.

As a matter of fact, if we head over to the data coming out of USA from the FED in regards to CPI% inflation, we’ve just had the announcement of more than expected CPI (Year-on-Year) as at January 2024 come to a figure of 3.1%, which in-turn landed at 0.2% higher than market expectations. This led to a knee-jerk reaction selling-off market wide not only just in Crypto but for traditional asset classes upon the announcement earlier in the week.

Given the strength of last week’s close on BTC at $48,316, it’s not difficult to imagine the possibility of BTC looking to keep maintaining its current trend until it reaches the $59,000 prior monthly close which saw the top of the early 2021 “Crypto-elon-doge” mania, from which price then corrected a whopping -55% back down in the subsequent two months following, flushing out much of the careless speculation and “bandwagon” investing backed by excessive leverage and Elon Musk hype-tweets. I suspect this level will remain of key importance when looking for headwind resistance in the near future.

The previous monthly resistance of $48,263 will now inversely act as support for this leg up we’re seeing currently. We’d like to see this level hold to keep maintaining this current trend and leg up to higher local high’s, although given that sentiment is already at rather high levels, we’re not expecting this leg up to keep breaking through major higher-timeframe levels of resistance without any retracement.

Vigilance is key in a market bereft of sensibility, although the laser-eye memes are returning in droves – it’s historically been accurate to see the bulls be trapped prior to the real rally beginning, allowing for eagle eyed investors to sniff out an incoming opportunity to which others may be blindsided by.

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