BTC Price Follows Historic Trading Pattern
• Bitcoin jumped 3% on Tuesday, before dropping 5% on Wednesday
• According to Bloomberg, after such a movement in a broadly bullish period for the cryptocurrency, it typically rebounds by around 7% within a three-to-ten day period.
• If this pattern holds true, Bitcoin could be back above $30,000 soon.
Potential For Quick Rebound
According to an article released by Bloomberg, if Bitcoin follows in the footsteps of a historic trading pattern that looks to be unfolding then it could be in for a quick rebound back above the $30,000 level. After BTC has jumped by at least 3%, only to then give back the entirety of this gain the next day during a broadly bullish period for the cryptocurrency, it typically rebounds by around 7% within a three-to-ten day period. This means that if this pattern holds true and Bitcoin was to see a quick 7% jump from Wednesday’s close near $28,800 USDT, then it would be back to just below $31K. The above pattern has played out 17 times during bullish market periods over the last five years when Bitcoin’s 14-Day Relative Strength Index was above 50 (it was above 50 on Wednesday).
Chart Analysis Signals Pessimism
While there may be some reason for optimism about an incoming Bitcoin price bounce according to Bloomberg’s analysis of historic trading patterns, chart analysis is sending a more pessimistic signal – at least for the very near term price outlook. On Thursday Bitcoin dropped below its 21 Day Moving Average (at $29054) and an uptrend from late March lows which opens up the possibility of testing support in the $26500 area. A drop below here could lead all way down to key long term support turned resistance in the $25200-$25400 range.
Macro Outlook Positive For Crypto Markets
The end of US Federal Reserve’s tightening cycle looks close as US inflation and economic growth decelerate which implies that macro is unlikely to return as major headwind to crypto markets in 2023 like it was in 2022. This combined with continued crypto adoption and progress towards regulatory clarity should bode well for crypto markets going into 2023.
Overall there are mixed signals coming from both technical analysis and historical data points but overall there is still potential for BTC prices to rebound in the short term if certain patterns hold true while macro conditions remain positive going forward into 2023 which should provide further tailwinds for crypto markets overall.