Bitcoin (BTC), which fell to its lowest point in three months, recovered more than $19,000 on Sep. 20.
Bitcoin struggles after dropping below $20K
The daily chart shows that the BTC price increased from $18,255 – $19,650. The 7.5% price rebound was similar to the stock market’s rebound movements. This suggests that investors are adjusting to a significant rate increase by the Federal Reserve on Sept. 20-21.
BTC/USD daily chart versus ACWI & Nasdaq Source: TradingView
There are many opinions on whether Bitcoin’s rebound will last. Jonny Moe, an independent market analyst, stated that the ongoing price action of Bitcoin is very similar to the sideways consolidation moves it made at beginning of 2018.
The current Bitcoin price rebound around $20,000 does not indicate that it is a long-term bull case.
This is definitely still lurking out there $BTC pic.twitter.com/UkJ4s312zS
— Jonny Moe (@JonnyMoeTrades September 19, 2022
Rudy Takala (ex-executive at Fox News and opinion editor at Cointelegraph) warns crypto traders that they should be prepared for “dark times” as a result of worsening global economic conditions.
Some analysts think that Bitcoin could be heading for a strong bullish turn in the future. Let’s look closer at these optimistic market outlooks.
Bitcoin is a “bullish hammer”
According to pseudonymous analyst TraderTardigrade, Bitcoin’s Sep. 20 candlestick was a bullish hammer that suggests weakening downside momentum.
When the asset falls significantly below its opening price, but recovers to close at the same level, a bullish hammer candlestick is formed. The hammer is seen by traders as a sign that the market has rejected it.
Trader Tardigrade applied the same theory to Bitcoin’s recovery move on Sep. 20 and noted that its bullish Hammer may herald a reversal.
#Bitcoin Updates: A “BULLISH HAMMER”, a candle printed on daily chart, may indicate a reversal. BULLISH Characteristics: Long lower wick White candle Low below previous swing low This indicates a strong price rejection below the candle.#BTC #Cryptos pic.twitter.com/8TkfoegZrb
— Trader Tardigrade, @TATrader_Alan September 20, 2022
Bottom of Pi-Cycle
Pi-Cycle bottom is another technical indicator that predicts Bitcoin’s sharp rebound.
The open-source indicator tracks two long term simple moving averages (SMA), the 471-day SMA, and the 150 day EMA. The history of Bitcoin prices shows that they peak when the 150-day SMA crosses below the 471 day SMA.
The price is expected to reverse its bullish trend in the days before and after the 150 day SMA closes above 471 day SMA. Titan of Crypto, a pseudonymous analyst, stated that Bitcoin may see a bullish crossover of the 150-471 SMA by 2023.
BTC/USD weekly chart with Pi-Cycle Bottom Source: TradingView/Titan Of Crypto
He noted that the “1st crossing occurred in July” and added:
“The 2nd cross has yet to happen. We might be closer to reversal than we think.
Aurelien Ohayon is the CEO of investment strategy company XOR Strategy. He believes that Bitcoin will reach $45,000 in early 2023. This is based on the Wyckoff Cycle pattern.
Related: The ‘FED sledgehammer will continue to batter BTC and ETH prices — Bloomberg analyst
The Wyckoff Cycle is made up of four phases: markup, distribution, accumulation and markdown. The cycle continues with the markdown phase. This is also the case for Bitcoin’s continuing price rebound, Ohayon explains.
BTC/USD illustration in Wyckoff Cycle phases Source: XorStrategy.com
Analyst concludes that Bitcoin is entering the Final Bullish Phase in the Wyckoff Cycle.
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