If the price breaks through the 8 EMA and 18 SMA, it could rebound more broadly. If Bitcoin were to lose the support zone from USD 35,000 to USD 29,000, it would confirm the search for USD 20,000.
The current recovery in the price of Bitcoin could give optimistic signals for February. The following weekly forecast will help uncover where the value of the pioneering cryptocurrency could head.
Bitcoin is trading at around USD 38,573 and has accumulated a 5.9% gain over the last seven days. Its daily trading volume is above USD 18.02 billion, and its market capitalization is about USD 738.05 billion, according to CoinGecko.
Analyst Andrés Tejero recently pointed out that several factors are causing fear in the cryptocurrency market. He mentioned the pressure from regulators, the possible increase in interest rates, and the uncertainty of Bitcoin mining due to high electricity consumption.
Interest rates are the aspect that has caused the most uncertainty in the stock market as a whole. However, the US Federal Reserve (Fed) continues to postpone increasing rates progressively.
Many hope that Bitcoin will decouple itself from risky asset market fluctuations, but it has not. For that reason, macroeconomic situations such as the current one could continue to harm it by generating a feeling of fear.
Despite Negative Indicators, Bitcoin Gives Optimistic Signals
The current rally of BTC clearly shows that calm comes after the storm. After its price suffered a sharp drop, on-chain metrics are encouraging for the short term.
The weekly metrics summary by CryptoQuant indicates that the bearish tide is calming down, and there could be a further respite ahead.
Although many indicators show neutral signals, the balance moves slightly towards the buy side.
Most metrics that track supply and demand, whale behavior, and market sentiment are bullish.
Technical oscillators, which were bearish for several weeks, have recently turned around.
The Weekly Forecast of the Price of BTC
The Bitcoin daily chart shows that the respite has not been very long, so there could be more selling in the short term.
However, sellers have yet to regain control of the Bitcoin market. As the days go by, the price could break through the top of the small channel in which it is, leading to further gains.
After the short-term trend, the price crossed the 8 EMA and 18 SMA to the downside. If it broke through them, a scenario with a 45% chance in favor, there could be a broader rally next week.
A bearish candlestick on heavy volume starting in February would invalidate the optimistic weekly forecast for BTC. If that happens, the price would quickly seek the area around USD 31,000.
Bitcoin Attempts to Hold the Most Significant Support Zone
Buyers are currently trying to defend the BTC price from a drop that could be rather worrying.
Bitcoin is touching the most significant support zone, ranging from USD 35,000 to USD 29,000 approximately. If it were to lose it, it would confirm the beginning of the crypto winter and the possible search for USD 20,000.
It is not very likely that this will happen, but nobody can rule out that scenario.
The price currently rejects low prices, using the 18-month SMA as a dynamic support. A crucial rally in the value of the pioneering cryptocurrency may be about to occur in the coming days.
By Alexander Salazar
