Bitcoin price rally to $19.5k prompts analysts to explore where BTC price could go next


After Bitcoin (BTC) hit a yearly high of $19,501 on January 13th, where does it go next?

Following a strong rally in the cryptocurrency market following a positively perceived Consumer Price Index (CPI) report, Bitcoin is currently witnessing a resurgence in bullish momentum.

The recent rally in Bitcoin is fueling increased volume levels and higher social engagement on whether the price is in rigging mode.

Is the Bitcoin Bear Market Over?

Although the market is still technically bearish compared to last week, investor sentiment is improving. Investor sentiment about the market hit a monthly high, according to the Fear and Greed Index, a crypto-specific metric that measures sentiment using five weighted sources.

Bitcoin Fear and Greed index. Source: alternative.me

Bitcoin price is now nearing the psychologically important $20,000 level, and many analysts and traders are voicing their opinions on where BTC price should go next.

Let’s explore some of these perspectives.

Bitcoin trading volume remains a concern

Bitcoin price has yet to recover to its pre-FTX levels, but it broke above $19,501 on January 13 for the first time since November 8, 2022. Despite the strength of the recent rally, some analysts believe that the BTC price should reach $21,000 before then. the current uptrend may continue.

According to Glassnode analysis,

β€œThe bullish trend that started on January 1st took bitcoin to $18.6-18.9k, but $19k needs to be crossed to have a new trading channel around $19-21k. Resistance is expected around these levels as bitcoin faces a medium-term downtrend. If the price fails to break the trendline, we expect a pullback towards the $16-17k area.

BTC price versus volume. Source: Glassnode

The lack of trading volume around $18,000 indicates weakness in current chain and centralized exchange (CEX) activity. The largest volumes and overall activity include the $16,000 level, indicating a firmer floor than the current price range. With less volume covering levels above $20,000, Bitcoin’s rally could be capped at $20,000.

Is this just a bear market rally?

Bitcoin still faces headwinds in a tightening macroeconomic environment, including mass exchange layoffs, Gemini and Genesis legal challenges, and the potential creation of a crypto-focused subcommittee of the US House of Representatives.

Furthermore, Bitcoin’s relative strength index (RSI) currently shows BTC as overbought. According to RSI analysis, a sharp downtrend may form as the price corrects.

Bitcoin RSI. Source: TradingView

Macro markets are also at key resistance levels. The US Dollar Index (DXY) is at key support, which means riskier assets like Bitcoin could start selling off if the index recovers. Bitcoin remains correlated with stocks, and the SPX mini futures index is also showing signs of a pullback.

TraderSZ explains below:

As suggested by TraderSZ, it may be difficult for BTC to reach higher levels with Bitcoin investors taking profits.

Historical analysis points to a new Bitcoin bottom

Bitcoin is currently below its 200-week moving average, and according to independent market analyst Rekt Capital, Bitcoin price may have already hit a macro bottom based on historical data. Historically, the “Death Cross” level indicates a bottom of $23,500.

While traders and technical analysis aren’t known for accurately predicting how long a bull or bear market might last, independent market analyst HornHairs used historical data from 2015 to estimate how long it would take for Bitcoin to reach its all-time high.

From 2015 to 2017, the bull market lasted 1,064 days, matched by the 2018-2021 bull market, which lasted the same number of days. If traders were to match the bear market observed between 2017-2018 and 2021 to the current market, it would take 1001 days for Bitcoin to reach its all-time high.

Despite the current conditions and the strength of the current price bounce, Bitcoin has proven many technical analysts wrong in the past. Risk-averse traders may want to consider increasing trading volume at higher prices as an indication of whether Bitcoin will eventually return to a bull market.