What’s Behind BTC Bounce to $24,000? This is what the analyst says
In the financial crisis that has engulfed the US banking system and the global economy, Bitcoin (BTC) thrived over the weekend. The cryptocurrency crossed the $23,000 level and looks set to take the lost territory of $25,000 by storm.
After filling the Chicago Mercantile Exchange (CME) gap at $19,800, BTC has managed to bounce with strength. The current price action caught the bears off guard, liquidating short positions totaling over $300 million in the last 24 hours.
For BTC investors, Bitcoin has served its purpose while the traditional US system has been caught in the crossfire of the Federal Reserve (Fed) and inflation rates in its mission to avoid a recession.
Signature Bank, Silicon Valley Bank and Silvergate Capital are among the victims of the hawkish inflation policy. But what are the keys to the price action that Bitcoin is currently experiencing? Cryptoanalyst Adrian Zdunczkyk weighs in.
Critical reasons behind Bitcoin’s rally
According to Adrian Zdunczyk, the price of Bitcoin has retreated 20% from its peak of $25,000. The analyst believes this confirms a local breakdown that does not affect BTC’s long-term shift, but could hint at a correction. The 200-day moving average trended sideways regardless of the drop below $20,000.
For the analyst, BTC’s current price movement is a long-term accumulation zone between the $15,500 and $25,200 levels. The bulls seem to be in charge now that the $21,700 level has been taken with great conviction by investors following the ongoing global meltdown of traditional markets.
The 200-day moving average has acted as a “magic” support at $20,000, which the bulls have quickly regained, providing a perfect opportunity for investors if another correction is coming. About this possibility, Zdunczyk said:
The 9-year seasonal review suggests that March is consistently a bearish and losing month. With -64.39% annualized returns and only 33.33% winning trades, BTC investors shouldn’t put much faith in this month being bullish.
On the contrary, the 11-year “Sell in May and go Away” pattern proves “favorable odds” for traders on the April-May price action, as the annualized return of over 72% on winning trades over this period historically provides an “optimistic outlook for the next two months,” according to Adrian.
Despite this forecast, a good consumer price index (CPI) for February, and no interest rate hikes above 25 basis points from the Fed, could lead to a significant uptrend for the most prominent cryptocurrency on the market.
A break above $24,000 and further consolidation in the previously lost zone is significant for BTC as it is in a critical area. The cryptocurrency is trying to break the resistance wall it failed to break four times before the correction below $20,000.
Currently, Bitcoin is trading at $24,100, representing a significant gain of 19% in the last 24 hours. Over the seven-day time frame, BTC has regained ground with a gain of 8.9%.
Featured image from Unsplash, chart from TradingView.com
