The world’s largest cryptocurrency Bitcoin (BTC) continues to show strength. However, the 4% correction of the day broke the enthusiasm of the bulls a bit. According to technical charts, BTC is trading at a crucial juncture of its 200-day moving average (MA).
Analysts are waiting for these levels in BTC price
Bitcoin (BTC) climbed to $ 22,600 on September 13, after gaining momentum on Monday evening. The price action reflected stocks that closed tight in the green as investors await key consumer price inflation data. The S&P 500 and Nasdaq ended Monday with gains of 1.1% and 1.3%, respectively. U.S. stock futures were in the green with little change at the time of writing.
Justin Bennett warns crypto investors not to get too comfortable. “It is doing the same as the S&P 500 did all year,” the expert explains.
GM legends. ☕️
Don't get too comfy. The S&P 500 is doing the same thing it's done all year.
The only difference is the length of this retest, which just means more trapped longs if it repeats.$SPY $SPX $BTC $ETH #stocks #crypto pic.twitter.com/YVdM6n5mfA
— Justin Bennett (@JustinBennettFX) September 12, 2022
Sharing the chart above that tracks the index, Bennet comments:
The only difference is the length of this retest, which means more trapped long if repeated.
The dollar index, a measure of the dollar’s strength against a basket of six international currencies, fell 0.1% to 108.22 at the time of writing.
Bitcoin’s status will depend on inflation data
Inflation data announced in the past hours came in slightly higher than expected. Craig Erlam, senior market analyst at OANDA, calculated the following probabilities in his recent analysis:
Whether it’s the prospect of a dove change, a weaker dollar, or an improvement in the broader risk appetite, something is giving cryptos a huge boost and this has helped Bitcoin hit its highest level since it went into free fall on Aug. Things may be getting better in the short term, but this may once again depend on inflation data.
What does on-chain data say for Bitcoin?
Analytical firm Santiment said that Bitcoin has risen above $22,000 for the first time in 3 weeks. Firm analysts wrote in a recent tweet:
Bitcoin’s transaction rate at profit/loss is at its highest level since March. It seems that many people see this slight jump as a trigger to re-buy.
📈 #Bitcoin has climbed back above $22k today for the first time in over 3 weeks. $BTC's ratio of transactions in profit vs. loss is at its highest since March, and it appears that many have viewed this mild bounce as the trigger to trade again. https://t.co/FTuzePMrj1 pic.twitter.com/XjCDRpL0fd
— Santiment (@santimentfeed) September 12, 2022
Ali Martinez was among the analysts who updated their forecasts. Specifically, he said that Bitcoin open interest has increased by more than 20% in the past four days across all exchanges.
#Bitcoin open interest across all exchanges has surged by more than 20% in the last four days. $BTC pic.twitter.com/vOk7986LHc
— Ali (@ali_charts) September 12, 2022
The charting expert also tweeted that when Bitcoin last hit the 200-day moving average on its 12-hour chart, it prompted a steep correction.
The last time #Bitcoin reached the 200MA on the 12hr chart, it resulted in a steep correction. The TD Sequential now presents a sell signal at the same level, anticipating a retracement.$BTC must print a 12hr candlestick close above $22,950 to invalidate the bearish outlook. pic.twitter.com/4EIBuCvhJu
— Ali (@ali_charts) September 12, 2022
On the technical side, the price’s rise to the 50 and 100-day moving averages was a trigger for new institutions. Jason Sen says that short traders should be careful in daily Bitcoin analysis.
Bitcoin daily analysis
cryptocoin.com As you follow, BTC suddenly spiked to the 50 and 100 day moving averages at 22,000/22,300. Jason Sen from DayTradeIdeas summarizes the situation in his daily analysis:
Shorts need to stay above 22500. A break higher is a buy signal targeting resistance at the 200-week moving average at 23000/23200. If we continue higher, call 24600/700. Any shorts on the 50 and 100 day moving average at 22000/22300 will target 21600/500. A low for the day is certainly possible here. But a break lower could target 21000/20900.
The two most recent technical analysts, Ali Martinez and Jason Sen, point to Bitcoin’s average response to movements. Accordingly, Ali Martinez, in his latest analysis, says that BTC price must break $22,950 to invalidate the decline:
When Bitcoin last hit 200MA on the 12-hour chart, it resulted in a steep correction. TD Sequential now presents a sell signal at the same level, predicting a pullback. BTC must print a 12-hour candlestick above $22,950 to invalidate the bearish view.
On-chain analysis
Also, on-chain data on the realized profit/loss of Bitcoin shows that profit is made for every price increase for Bitcoin. The Actual P/L ratio for Bitcoin is currently below 1.0, highlighting a strong bear cycle. As Glassnode explains:
An interesting observation is the uptrend, which started in early June and dropped to 0.58 in mid-August. This pattern confirms profit growth by investors during this relief rally.
After trying dips below $20,000 last week, BTC price was fast enough to bounce back, holding $20,000 as a strong support level. Analyst Ali Martinez also believes that the bottom of Bitcoin may be inside. The crypto analyst wrote in one of his recent tweets:
The number of new daily BTC addresses on the network seems to be growing rapidly, hovering around 410,000 addresses per week. A sustained move above the 415,000 BTC address could confirm the optimistic outlook.
Also, the total number of BTC addresses holding at least one or more Bitcoins has approached 100,000. This indicates that its individual players continue to accumulate.
