If on Tuesday it was the appearance of the chairman of the Federal Reserve, Jerome Powell, which prevented the rally, with the declarations that the reduction of stimuli will take place at a faster rate than expected, on Wednesday, the first contagion of Ómicron in the US swept away any bullish attempt. Analysts indicate that the behavior of the crypto asset resembles that of a risk asset, rather than a hedge, in the latest derivative of the virus, as the news caused another flight to safe havens, such as the dollar or gold.
“Like other assets in the same range, it remains vulnerable to continued shifts in sentiment as information slowly comes in,” said Craig Erlam, analyst at Oanda. “It seems that we are jumping from good news to bad news and vice versa on a daily basis, which may not be a good omen. Although at this point and after such a decline in risk assets, the absence of news can also be a temporary relief, “he added.
Other experts, on the other hand, remain optimistic, and believe that “although the new variant of the coronavirus has raised concerns about the possible fall in cryptocurrency prices, it is also essential to take into account that this market had seen strong growth during [la pandemia]”said Danny Chong, co-founder of Tranchess, in statements to ‘CoinDesk’.
Some analysts remain confident that the clouds around Bitcoin will eventually fade and that the bulls will once again take command of the quintessential crypto currency, obeying seasonal patterns, as December is usually a good month for the crypto asset. For this group, the u $ s70,000 continues being the objective to conquer.
The Bitcoin Fear and Greed Index entered “extreme fear” territory during last week’s selling. The index is at the lowest level since the end of September, which preceded a rebound in the price of bitcoin. Furthermore, technical indicators are starting to rise from oversold levels as price pullbacks remain limited.
“We are at a very interesting market moment. If there is a moment to jump into the pool in bitcoin it is right now, in the middle of the support zone”Said José María Rodríguez, an analyst at Bolsamanía. Of course, he advises “a ‘stop loss’ at closing prices below $ 53,000.” “Above US $ 60,000 would confirm a return figure with a target at the all-time highs (US $ 69,355) and above … US $ 100,000? Everything is possible in bitcoin ”, he concludes.
Long-term bullish, short-term doubts
Bitcoin (BTC) tried to move above the $ 59,300 resistance area, which has rejected it twice so far. The daily time frame shows that BTC has risen since it rallied on Nov 28 (green icon). The bounce in price occurred just above the $ 53,350 area, which is both a horizontal and Fibonacci support level. As long as the price is trading above this level, the trend can be considered bullish.
Technical indicators also began to show bullish signs. The MACD, which is created by a short-term and long-term moving average (MA), has created four successive higher momentum bars. This means that the short-term MA is accelerating relative to the long-term average.
The six-hour chart shows that BTC is still following the descending resistance lines that it has been trading mostly since the all-time high on November 10. This resistance has already rejected the price twice, on November 30 and December 1.
Similar to the daily time frame, the technical indicators are showing bullish signs, but have yet to confirm an uptrend. While the RSI remains above 50, the MACD is not positive yet.
This supports the possibility that the short-term correction is complete and BTC could make another attempt to break above the descending resistance line.
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