Despite huge market volatility, Bitcoin has managed to rally and break out of its current channel and is expected to surge in the coming months.
BTC price has been fluctuating above the $21,000 support recently. It gained a few points above $21,450, but not much. Bearish activity is near the $21,550 and $21,650 levels. The price is likely to start a steady rally wave above the next resistance level, which is near $22,000.
BTC prices have been widely affected by troubling macroeconomic conditions in Europe such as rising gas prices across the globe in the last few days.
Another cause for concern is the DXY index, which has been rising as investors move money into U.S. reserves amid fears of a possible global recession. This affects all other markets, including crypto asset markets.
Catalyst for Bear Market Extension
According to the widely respected and followed Bitcoin (BTC) and cryptocurrency markets are only at the beginning of an extended bear cycle, according to expert Nicholas Merten.
DataDash moderator claimed in a new strategy session that other markets have begun to warn of the emergence of an unfavorable macro environment that will inevitably weigh on the digital asset.
“Commodities are going up again, the dollar Indices are higher, on top of that, the bond market is starting to consider further Fed Fund rate hikes. Stocks are living in a fairy tale because of inflation and are not prepared to support today’s bull market.”
Analysis of short-term patterns
Higher prices seen earlier this month will act as resistance, pushing BTC and ETH back to lower levels and into a more protracted bear market, according to Merten, who predicts Bitcoin And maybe Ethereum (ETH) might come along.
He added that Bitcoin and Ethereum could see a short-term rally in 4 hours to see if they can get back above $24,000 and start using those levels as support.
Also, he said these levels are critical and there is no guarantee that the price will return to this range again, but expects a possible rally in the short term. There will be a significant downward correction in a few weeks.
BTC could reach lows of $11-12,000 before a proper bull run begins. This means that BTC currently has a 50% chance of falling, but given its previous performance, it could rise at least as high as $68,000. Therefore, when stocks and cryptocurrencies emerge from a bear market, there is also a chance for a 3x upside return. Also, if BTC simply reverts to its fair value, there is a 2x payout.
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