Bitcoin price continues to trade in a narrow range between the central region around $18,000 and $19,500. The cryptocurrency was moving sideways after the rejection from the $20,000 level, which led to a spike in fear and uncertainty across the nascent sector.
At the time of writing, Bitcoin is trading at $19,100 with a gain of 2% in the last 24 hours and a loss of 1% over the past week. Bearish sentiment and fear in the cryptocurrency market point to a potential rally that may coincide with macroeconomic forces affecting global markets.
Bitcoin price is bottoming…for now
After the US Federal Reserve (Fed) announced last week its new interest rate hike, selling pressure dominated the bitcoin price. The bears managed to push the cryptocurrency near a multi-year low of $18,000.
These levels act as critical support as BTC price trends to the downside from the all-time high of $69,000. With selling pressure gaining momentum, bitcoin has remained around these critical levels.
Analyst Justin Bennett believes that the price of BTC is recreating the price action shown in early 2022. At that time, the price of Bitcoin was recovering from a massive crash and formed a channel between $37,500 and $49,500.
The cryptocurrency has been trading sideways within this pattern for several months only to be pushed lower due to macroeconomic developments. This led to another massive crash in May 2022.
Bennett believes that the bitcoin price may form a similar channel since late June, with $27,500 likely to act as critical resistance. As seen below, the analyst believes that Bitcoin has reached the bottom of the pattern and may be ready to retest the top around $26,000 before dropping below $18,000.
“The same bitcoin dollar structure as February and April, only missing a retest of $26,000,” the analyst wrote.
Macroeconomics ready to support Bitcoin price rally
Additional data provided by Messari’s chief analyst, Tom Dunleavy, suggests that the crypto market could benefit from a bounce in traditional markets. With the Federal Reserve raising interest rates, risky assets, such as bitcoin and stocks, have shown a strong correlation.
(1/5) It might go on for another tough week, but everyone always says the bottom comes when we hit the peak of the downtrend.
Are we almost there?
Some interesting data points: In futures positioning, new leveraged accounts are shorter than in the year, by a wide margin pic.twitter.com/VsXwFHj6na
– Dunleavy (@dunleavy89) September 26, 2022
At the time of writing, bearish sentiment in financial markets appears to have reached levels last seen in 2020, during the onset of the COVID-19 pandemic. This is usually an indication of a market bottom and the potential to be comfortable with the accumulation of short positions in the market.
According to Dunleavy, the buy/sell ratio (P), a measure used to measure the number of put (call) versus put (sell) contracts, is at a level of 1. This can translate into a higher bearish sentiment in a global brand.
The last time the buy/sell ratio was at its current levels, the bitcoin price and the cryptocurrency markets entered a multi-year bull run and price discovery towards all-time highs. While the current macroeconomic scenario may define any upward price movement, the momentum could be strong enough to reach $26,000, Bennett suggested.
from San Jose News Bulletin https://sjnewsbulletin.com/bitcoin-price-hike-in-this-manufacture-btc-could-target-26000/
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