07.02.202323:46 Forex Analysis & Reviews: Bitcoin is around an important level

Bitcoin crawled to the level of $24,350 and has been strictly under it for two weeks. As we can see, bitcoin has no strength to overcome this level yet, which may well lead to at least a bearish correction after such a serious rise. To recap, Bitcoin was up 50% in January. I don't think that the bullish trend has started yet. That opinion is supported by the fact that the Federal Reserve is still raising its key rate as before and the QT program is withdrawing about $100 billion a month from the economy by selling Treasuries and mortgages. These two monetary policy tools are indicative of tightening. Bitcoin began its collapse precisely because of global policy tightening (and not just in the U.S.).

So far, the technical picture under the prism of fundamental background looks like a "trap". Recall that the current bitcoin growth started after the U.S. inflation report for December. Inflation fell for the sixth consecutive time, but it was the sixth time that Bitcoin responded with a strong rise, as crypto traders believe that the Fed should have eased its monetary pressure on the economy after that. Why hasn't Bitcoin risen before when the Fed has already lowered the pace of rate hikes once? Why didn't bitcoin rise on the fifth inflation report? These questions remain unanswered for now.

I think we can't rule out the possibility that the growth we saw from the cryptocurrency is "artificial" because big players wanted to sell it at a better price. I don't see why Bitcoin can show huge growth in 2023. This year didn't start very well, strong earthquakes in Turkey and Syria can lead to changes in the markets, to redirection of money flows in the world. We have long been accustomed to all kinds of cataclysms and events of a shocking nature. "Thanks" to the "Coronavirus" pandemic, which, as it turns out, was just the starting point of a whole series of different events of a destructive nature. Thus, the demand for risky assets should not rise yet. Still, it should be noted that overcoming the level of $24,350 may provoke a new round of strengthening. This will be a purely technical signal.

On the 24-hour chart, Bitcoin continues to move to $24,350, which has already been almost worked off. A rebound from this level could return Bitcoin to the downtrend, while overcoming it would raise doubts about the persistence of the bearish trend. I don't think the trend has started yet, or that there are no more declines in 2023. The fundamental backdrop remains quite challenging for Bitcoin. Nevertheless, you can buy while aiming for $29,750 when it crosses $24,350. Sell for a rebound and aim for $18,500.