Bitcoin update – April 21th, 2023
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
David Lifchitz – CIO Tellurian-ExoAlpha
On April 10th, Bitcoin reached $31k pursuing its ascension but hit a glass ceiling. On April 16th, the first sign of a possible pullback occurred when Bitcoin dipped down 3% on the day, but that was canceled the very next day when it jumped back to $31k, and then a second drop came but there was no recovery this time and Bitcoin kept on falling down to $27.3k at time of writing on 4/21.
Potential reasons for that pullback are numerous, from simply buyers exhaustion after the huge run-up since the beginning of year and profit-taking initiated with Bitcoin back above $30k, to liquidation of the Silk Road booty by US authorities, to correlation with traditional assets markets which also began to pullback on recession fears, FED’s inflation-fighting continuing with more rates hikes… and probably a mix of all of these reasons.
So far, Bitcoin is nearing a short-term support around $27k which is the low of the $27k-$28k range in which it has been stuck in March before eventually breaking out, and $27k is also the lower band of the Bollinger envelop, which tends to also act as a near time target. We are Friday nearing the end of day, and given the low liquidity of the weekends, no one should read too much into the price action of the upcoming weekend in case of a break below the $27k level.
Bitcoin may find short-term support at the $26.5k-$27k level in the next few days, but the next downward target is $25k should more traders were to throw in the towel.
On the upside, a bounce back to $29k is possible but that might be also the high of the range, with not much to support a new breakout toward $31k and above.
So, will the old Wall Street adage “Sell in May, and go away” prove to work also in cryptoland?