Bitcoin resilience gives bulls cause for hope as it holds above $23k
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(Kitco News) - The crypto market had an all-around positive day on Thursday as Bitcoin (BTC) continued to hold its recent gains while notable developments for certain cryptos led to double-digit breakouts – yet more signs that winter is coming to an end and a bull market run may be in the works.
Stocks trended higher after the latest gross domestic product data (GDP) came in higher than expected, with the U.S. growing at a 2.9% annual rate in the final quarter of 2022. At the close of markets, the S&P, Dow and Nasdaq all finished in the green, up 1.10%, 0.61%, and 1.76%, respectively.
Data provided by TradingView shows that Bitcoin traded within a narrow range between $22,870 and $23,270, with neither the bulls nor bears managing to gain the upper hand to control the price action.
BTC/USD 4-hour chart. Source: TradingView
Insight into which levels to keep an eye on moving forward was provided in the most recent newsletter from analysts at TechnicalRoundup, who highlighted three price zones to watch.
The first level to watch is the support zone between $19,400-$20,000. “This is a very clear level for directional bias,” the analysts said. “Above it, one can be justifiably bullish on account of the reclaim of the summer range breakdown. Below it, everything looks like garbage. It’s the best (and only) large pullback support worth paying attention to.”
The second level to keep an eye on is resistance at $23,300, which is “the last visible monthly structure before the old range closer to $30,000.” The analysts warned that if a pullback does happen to occur in the coming week(s), “it will most likely be as a result of a reaction to or a failed breakout from the top of that range.”
The final level to monitor is the 2021 range low of $35,000-$37,000. “This is a logical target for a sustained range breakout and massive countertrend move,” TechnicalRoundup wrote.
Overall, “the most impactful signals would be losing $19,400-$20,000 (we’re screwed) or finding acceptance above $23,300 (we’re back). A failed breakout above $23,300 would land us firmly at “we’re sort of screwed, pray for $20k,” the report concluded.
Bitcoin and Gold
For the gold and bitcoin lovers in the crowd, several analysts on Twitter have highlighted the increasing correlation between the two assets in recent months, noting that it appears as though moves in the Bitcoin market lag behind developments for gold.
Outside of momentary reactions to geopolitical events...— TechDev (@TechDev_52) January 25, 2023
You think #gold has been leading #bitcoin for 4 years? pic.twitter.com/a0CswUWkHH
Further insight into this relationship was provided by Capriole Investments founder Charles Edwards, who posted the following tweet noting the time relationship that exists between highs and lows in the gold and bitcoin markets.
There is a relationship between Bitcoin and gold and gold is pumping.— Charles Edwards (@caprioleio) January 24, 2023
When you lag the gold price, it's easier to see. Bitcoin tends to top between 0-6 months after gold and bottom 0-3 months after gold. This gap is approximate and will likely close with time. pic.twitter.com/36gghO7JFf
With the price of gold continuing to trend higher in 2023, the above chart suggests that the rally in bitcoin will continue for the foreseeable future until a meaningful reversal in the gold market occurs.
A mixed day for the altcoin market
The altcoin market was again evenly spilt between winners and losers on Thursday as traders rebalance their positions in preparation for the next leg up in the market.
Daily cryptocurrency market performance. Source: Coin360
Conflux posted the biggest gain for the day, with its CFX token increasing 92.38% after the project revealed that it would be integrating with Little Red Book, the Chinese version of Instagram, to let users display their NFTs on the platform. Other notable gainers include a 21.9% increase for dYdX (DYDX) and an 18.5% increase for eCash (XEC).
The overall cryptocurrency market cap now stands at $1.05 trillion, and Bitcoin’s dominance rate is 42.4%.