Bitcoin Charts Pin $25,000 as Make or Break for Revival - BLOOMBERG
(Bloomberg) -- The $25,000 level for Bitcoin is emerging as a key technical hurdle for the token’s partial bounce from last year’s crypto rout.
Bitcoin scaled that level on Feb. 16 for the first time since August but has struggled to stay above it. The largest digital coin advanced 2% on Monday to fluctuate just around the $25,000 mark.
The token’s strong new year performance appears to be partly driven by the idea that the worst of monetary tightening is over. Some investors have also taken succor from the view that the Federal Reserve can quell inflation without triggering a US recession, which has boosted risk assets from equities to crypto.
“With the market swapping the ‘hard landing’ narrative of the fourth quarter last year to one of ‘no landing’ in the first quarter of 2023, speculative assets have been well supported, including Bitcoin,” Tony Sycamore, market analyst at IG Australia Pty, wrote in a note.
At the same time, skeptics contend US economic resilience will just end up with higher-for-longer borrowing costs that will undo the sanguine mood. The crypto sector also faces a US crackdown after the collapse of the FTX exchange.
The bull-bear tussle for now is being fought out around $25,000 for Bitcoin.
“Whether it can break above $25,000 soon or not should be very important,” Matt Maley, chief market strategist at Miller Tabak + Co., wrote in a note. “The next week or two should be critical for Bitcoin and other cryptos.”
Here are three charts analyzing that theme:
Bitcoin traced a series of so-called doji candles in recent days. These represent trading sessions where the token posts about the same opening and closing price despite swinging through the day. Some chart analysts view this as signifying indecision among investors about the outlook, while others may interpret the dojis as potentially portending a pullback.
Bitcoin is close to breaking past the second upward standard deviation of its average price since a low it hit after FTX’s November collapse. That would take the rebound into relatively rare territory. Bears will say that’s reason for caution. Bulls might seize on it as a sign of an unusual rally still unfolding.
Options data from Deribit show a high number of outstanding Bitcoin call contracts — so-called open interest — at strikes of $26,000 and $30,000. If Bitcoin does manage to scale the $25,000 mark, those bets suggest the next major tests lie at those levels.
For crypto market prices: CRYP; for top crypto news: TOP CRYPTO.
(Updates with Monday’s trading in second paragraph.)