Bitcoin Can Enter Strong Correction If It Fails to Cross $25,000

Last week, the world’s largest cryptocurrency made a strong move to $25,000, however, it facing strong resistance at those levels. As of press time, BTC is trading 1% down at $24,615 and a market cap of $475 billion.

Bloomberg’s senior commodity strategist Mike McGlone explains how the current technical setup for Bitcoin supports tactical shorts. During the entire Fed tightening season, Bitcoin’s 50-week moving average has never crossed under its 200-week moving average. However, the possibility of that happening now has come closer.

However, if the BTC price manages to swing above $25,000, it would signal a divergent strength against the Fed’s decisions. The CPI data for January 2023 continues to suggest that inflation remains sticky and that Fed could continue to raise interest rates going ahead. In his latest tweet, Mike McGlone wrote:

Hollow Rally or Enduring Recovery? Bitcoin $25,000 vs. the Fed – Cryptos have never faced a US recession, Fed tightening and the Bitcoin 50-week moving average below the 200-wk. My long-term bias is quite bullish, but the 1Q bounce to good resistance may favor tactical shorts.

Bitcoin, Crypto and Stock Markets

Bitcoin and the broader cryptocurrency market rallied with the impetus provided by the surge on Wall Street. In fact, the crypto market has managed to outpace the traditional markets in 2023.

Since the beginning of 2023, the S&P 500 is up by 6% while the Nasdaq 100 is up by 13%. On the other hand, the MVIS CryptoCompare Digital Assets 100 Index of leading tokens is up 40%.

On the other hand, Hong Kong is planning to relax rules and allow retail traders to trade larger cryptocurrencies like Bitcoin and Ethereum. This would lead to increased liquidity in the crypto space going ahead. The retail backing has so far helped BTC surge by over 50% since the start of 2023. JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou said:

“This positive retail impulse year-to-date is naturally more dominant in crypto given the absence of institutional investors at the moment”.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.