bitcoin (BTC/USD) price picked up notable momentum on Wednesday as the digital currency rocketed to new 2023 highs. Granted, 2023 is only 6 weeks old and the current bull run looks pretty insignificant on the one-year chart.
But I’m not here to crash the party, just trying to gather information to make an informed decision on where bitcoin is going.
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First, let’s discuss where we are now. BTC broke above the $24,000 mark as part of one of the strongest daily gains in months. Invez informed of An article on bitcoin’s strong momentum earlier today and as is often the case in the crypto space, can become irrelevant and antiquated within hours.
That said, don’t break out the Champagne – yet.
This is what worries me the most. The 200 day moving average is one of my go-to and top indicators. As long as bitcoin trades south of the 200-day MA, the bears are still in control. One break above and all bets are off the table.
But we have to get there first and it won’t be easy.
The 200-day moving average coincides with a key resistance level and last summer’s high, when bitcoin looked ready to rebound from strong selling pressure.
Many traders and analysts on Twitter have a similar view, and for good reason. Call it cautious optimism perhaps. Just five days ago, the net unrealized gain of all bitcoins in circulation was only $2,500.
Meanwhile, both the US Dollar Index and Bitcoin are higher on Wednesday. Has this ever happened before? I don’t think so and it could be problematic. The DXY measures the strength of the US dollar versus other assets.
When investors are shifting from other assets into the greenback, the DXY index goes up. There is a typical inverse correlation between DXY and bitcoin but it is not the case right now. I don’t like uncertainty.
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