Analysts weigh Bitcoin’s potential next moves

Bitcoin rose 70% from its November low despite concerns about rate hikes, thanks to expectations of ETF approval. Analysts Cointelegraph presented several scenarios for further price dynamics.

Earlier bulls had to retreat from the $30,000 psychological level. That turn of events left many traders wondering whether the price would fall again in the coming months, despite the halving scheduled for April 2024.

From a fractal-analysis perspective such a scenario cannot be ruled out. As a target, specialists identified the $21,500 mark (−17.75% from current levels).

Its current movement mirrors what happened in 2018 — then, as now, prices stabilised near the 0.236 Fibonacci retracement level. The last time after a period of consolidation prices touched the rising trend line. If repeated, Bitcoin could fall to the level indicated above.

As an additional argument, analysts cited the strengthening of the dollar. The U.S. dollar index (DXY) reached its highest level since November 2022. The chart below shows the negative correlation between the dollar and Bitcoin throughout 2023.

The DXY rose for the 11th week in a row after the Federal Reserve left the key rate unchanged on September 20. The chart also showed signs of a potential “golden cross” — the crossover of the 50-day and 200-day SMA from below — a strong bullish signal. 

What on-chain indicators say

Analysts say on-chain metrics provide an ambiguous picture.

The Coin Days Destroyed indicator, which tracks movement of the oldest coins, surged on September 19. In other words, some hodlers moved their coins, which could signal profit-taking. Experts stressed that such a pattern has often occurred before price declines.

Analysts also noted a reduction in coins on centralized exchanges’ balances. Such dynamics point to a growing propensity to hodl.

Analysts’ views

Trader Skew noted a low trading density below $27,000, which could trigger a breakout above that level.

lol https://t.co/xlWnrxLmTD pic.twitter.com/kPPKlfLj0Z

— Skew Δ (@52kskew) September 27, 2023

Analyst Rekt Capital allowed for a correction to $18,000. He justified his forecast with a fractal pattern he identified before the previous bullish impulse.

“History shows that the next 140 days will be decisive for dollar-cost averaging (DCA) in the run-up to a parabolic rally after the halving. If Bitcoin is going to retrace from here, it will most likely be during this 140-day window”, — a specialist commented.

#BTC

History suggests that the next 140 days will be crucial for dollar-cost-averaging in preparation for the Post-Halving parabolic rally

If Bitcoin is going to retrace from here, it will most likely be during this current 140 day period$BTC #Crypto #bitcoin pic.twitter.com/VbAOKBpcsD

— Rekt Capital (@rektcapital) September 27, 2023

Earlier Cointelegraph analysts doubted that the “golden cross” in the dollar index would pose problems for Bitcoin would pose problems for Bitcoin.

As noted, amid Bitcoin’s resilience, the correlation of digital gold with the U.S. dollar has fallen to zero, while with leading stock indices it has become weakly negative.

Earlier, BitMEX co-founder Arthur Hayes warned of a possible brief dip below $20,000 followed by a new bullish impulse. However, in September he pointed to positive prospects for the first cryptocurrency despite the Fed’s policy.