The bullish trend of Bitcoin continues to weaken, and the asset is increasingly moving towards consolidation. Over the past two weeks, the cryptocurrency has made three false breakouts above $23k, which indicates a decrease in buying potential.
At the same time, sellers continue to accumulate volumes and gradually put pressure on the price, bringing Bitcoin closer to a full-blown correction. Buyers continue to hold key positions for a bullish move, but volumes are falling every day, which hints at the entry of BTC into a correction phase.
Bitcoin has been approaching a correction phase for a long time, as the asset moved in an upward direction without pause throughout January. Last week, the rise in the price of BTC stalled, causing the largest profit-taking in two years.
Despite the decision by a large portion of investors to lock in profits, the crypto market continues to attract investment. According to CoinShares, the inflow of investments in crypto products last week was $76 million, down from two weeks earlier.
At the same time, BBG experts are confident that Bitcoin can resume its bullish trend in the near future. Analysts attribute this to the upcoming formation of the "golden cross" pattern, when the 200-day MA crosses the 50-day upwards.
The situation remains ambiguous since, on the one hand, buyers continue to hold positions near $23k and, with difficulty, absorb bearish volumes. On the other hand, over the past five days, BTC has not formed a single green candle, indicating growing selling pressure.
Stock Market and Bitcoin
Disturbing news comes from the stock market, where, according to Goldman Sachs forecasts, the local bull rally is ending. And the bank's analysts are confident that, despite strong economic indicators, the stock market is in for a difficult year.
Wall Street Journal experts also note that the release of the latest economic statistics, especially on the labor market, may induce the Fed to raise the key rate two or three more times. Recall that investors expected the final chord of the regulator's policy in March.
The performance of S&P 500 is also gradually declining. The asset reached the level of $4,111, after which it began to decline locally. The technical metrics of the indicator point to further declines, but overall the SPX remains in bullish hands.
The bears are having a hard time developing the downward movement, which is evident from the candlestick volume dynamics of the last two days. Buyers are holding positions near $22.8k–$23k, and as long as this area is intact, BTC will continue to move sideways.
Meanwhile, on the 1D timeframe, Bitcoin does not show consolidation. The RSI index has made a local reversal in the upward direction, which may indicate an attempt by the bulls to absorb bearish volumes. At the same time, the Stochastic and MACD are moving sideways, smoothly turning into a downward movement.
However, Federal Reserve Chairman Jerome Powell is expected to give a speech on monetary policy today. Given the WSJ data, we can expect negative news that the Fed will continue its policy of raising the key rate.
For sellers, Powell's statement can become a key trigger for a bearish breakdown of the $22.8k–$23k area. In such a development, we should mark out two key bullish targets, the levels of $21.8k and $20.4k. If the circumstances are favorable, the corrective movement will end here.
However, if the market plunges into panic again and starts fixing breakeven/minimal profit in masses, BTC might continue decreasing to the $18.8k–$19k levels. As of February 7, such a scenario is unlikely, but possible.