The price of Bitcoin lost its upward momentum after touching $24,000 and closing below $23,000.
After a difficult bear market that lasted for a year, investors with shorter time horizons and Bitcoin miners have been cashing out their holdings in recent weeks.
Glassnode, an on-chain intelligence platform, discovered that long-term owners persisted in hoarding more currencies.
On Tuesday, the price of Bitcoin was around $22,979, according to market data supplied by TV. This represents an increase of approximately 36 percent over the previous 30 days.
Suppose adverse sentiment continues to prevail in the weeks ahead. In that case, the relief rally may be completely wiped out, and the asset might fall to the next significant support level, somewhere around $18,000.
Yuya Hasegawa, a crypto market analyst at the Japanese bitcoin exchange Bitbank, has echoed a similar story by noting that the high-impact news may already be built into current prices. Hasegawa also mentioned that others had repeated a similar narrative.
The United States, as was widely anticipated, went ahead and raised its federal interest rates by 25 basis points. In addition, the Labor Department announced the highest rise in nonfarm payrolls, which came in at 517,000 for January. This number was far greater than the 187,000 projection provided by Dow Jones.
Hasegawa observed that "Bitcoin has weathered a week filled with key events and economic data while keeping the price around $23,000. However, the market may have expended reasons to acquire the coin and might be susceptible to profit-taking sell orders this week."
The prospect of a slow market expansion in 2023 should be a point that crypto currency traders have to take into consideration, according (1) to Noelle Acheson, an economist who writes for the Crypto is Macro Now newsletter.
In addition, most experts feel that a recession or a slowdown in economic growth is imminent.
According to Acheson's observation, "Expectations are turning to further contraction, and increased rates for more (what the Fed has already been stating all along), which is not beneficial for assets exposed to risk."
What Story Does the Price Action Reveal?
Even with a 6 percent drop in value over the previous week, the price of bitcoin still needs to provide clear technical data on where it sees itself heading next.
According to Rekt Capital, a well-known crypto currency analyst on Twitter Inc, Bitcoin traders must refrain from jumping to the conclusion that the previous trend is finished or that a new trend is about to emerge. As a result, the analyst believes that the upcoming few weeks will be crucial for determining the prognosis for the next quarter.
If Bitcoin bulls can restore momentum in the weeks ahead, market watchers anticipate that $30,000 will be the next landing spot for the crypto currency.
Consequently, the market for other crypto currencies, which came into existence before Bitcoin from a historical point of view, can see further rises.
If present levels are not maintained, a capitulation may cause the price of bitcoin to drop below $18,000 and possibly retest $15.5k.