Bitcoin crossed $23,000 on Saturday morning (21) and, for the first time in a year, it also broke above the 200-day moving average. This is a widely watched long-term indicator, as crossing the moving average can indicate a change in the direction of the trend.
“Bitcoin has broken its 200-day moving average for the first time in over a year due to the strong rally seen in the last 2 weeks.said Jack Neureuter of Fidelity Digital Assets Research.
The last time Bitcoin fell below its 200-day moving average was in January 2022, almost exactly one year ago. A bear market year followed, with the price falling from $69,000 to $15,000 on the day the release was announced. FTX bankruptcy in November.
It has rallied ever since, albeit to levels that to the general public might seem like it is still stuck in cryptocurrency winter. However, the sentiment seems to have changed significantly and the focus turns to the upside potential.
Even CNBC is getting in on the game, pointing out that investors’ cash holdings are near a record $4.8 trillion in money market funds. That’s all in dollars they could be waiting to really invest after a dismal year in cryptocurrencies, stocks, bonds, and many fiat currencies.
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However, investors in general are likely to remain cautious. The S&P500 tries to cross the resistance line at $4,000. The Nasdaq surprised Friday with a 2.5% jump.
China claims to have refocused on market opening and reforms, respecting property rights, and even intellectual property rights.
There is also the speculative potential that they could open cryptocurrency exchanges, starting in Hong Kong. Also, this China reset, if it goes through, would be a pretty big development that would affect assets.
Reading many investment letters, there is a long line of melancholy pointing to supply chain problems, the war in Russia, high inflation, interest rates, recession, yes, climate change and of course the list can go on. indefinitely.
It sounds like they’re pretty down on themselves portraying 2022 as some kind of terrible year, and right or wrong, our point is more that people are probably sick of hearing that, especially investors.
Instead, the outlook for that low point, except for Ukraine, is pretty bullish, or so analysts at JP Morgan seem to think.
For Ukraine, they are preparing for an increase. Russia has been training forced recruits for months and will now send them out in a few weeks.
The West is preparing for this, sending tanks. Things may get tough for the Ukrainian military, but we have to hope that this is the wave of 2006.
After Mission Accomplished, the armed rebellion reached the point where Iraq was torn apart in 2004. The response from the then US government was an increase, 100,000 new troops in 2006, which seemed like a lot.
Trained troops, not conscripts, but that didn’t go well and made the situation worse. So much so that the public began to turn against the war at that time with the resignation of Tony Blair just a year later when George Bush departed to Obama’s new tune.
There isn’t much reason to think that this Russian wave will be any different. They are doubling down on the mistake, not least because the Western public will be alarmed if they gain any benefit by forcing a response from democratically elected politicians.
And that matters, but on a structural and principled basis, since this is the first time a great power has attacked a democracy since Hitler.
As far as the markets are concerned, however, the matter is now largely in quarantine, with sanctions on both sides, now one more 2022 story in cryptocurrency.
Silvergate bank said it had $2.5 million in the Genesis bankruptcy. It is a very small amount and they claim that “Silvergate’s exposure is minimal and customer deposits are, and always have been, held securely.”
Osprey Bitcoin Trust (OBTC), which you’ve probably never heard of but is just like GBTC, went to the bailout. They have $62 million worth of BTC in the fund and “are considering an investor bailout program”.
Since it’s a small amount, and since these types of vehicles are no more, now that we have ETFs in Europe and Canada, the market naturally didn’t care.
On the mining side, Provident Bancorp “recovered cryptocurrency mining rigs in exchange for forgiveness of a $27.4 million loan relationship” in September.
This shows that the miners are in trouble and the bears have squeezed out all they can, leaving only the miners who are not desperate to continue operations.
Danger in the market?
All of this, as bad as it is for those involved, could show that the bears have gotten too fat to the point where they have nothing left to eat.
However, sentiment in the cryptocurrency market is likely to remain appalling as far as the general public is concerned. You can’t even mention bitcoin right now, which is maybe a good thing because that might be exactly when you should mention it so the troll feels it.
So we are in ‘dangerous’ bullish territory as reaching $23,000 is very exciting, and the once excruciating sums may now seem too high for day traders, and someone somewhere must fiddle for the bears.
We may hit resistance and get more dips, but we may not see some price points again, and this is what can make trading dangerous for those who do not do their day job.
Because we are in sober times and that means if you go shopping, you wait. Additionally, the moving average crossover is often an indicator to buy, which may explain what looks like an impressive rally over the past few days.
Traders say resistance could be at $25,000, but somehow these numbers seem like a joke that if it works out as before, it’s a bit like saying resistance could be at $4,000.
However, since no one knows for sure if this will happen, the bullfight it could be the show of the year that we can all enjoy.