Bitcoin Price Analysis: BTC Faces Difficult Resistance Level Going Forward
Bitcoin (BTC/USD) price gained remarkable momentum on Wednesday as the digital currency hit a new high in 2023. Granted, 2023 is only 6 weeks old and the current bull run looks pretty insignificant on the one-year chart.
But I’m not here to spoil the party, I’m just trying to gather information to make an informed decision about where Bitcoin is headed next.
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First, let’s discuss where we are right now. BTC broke above the $24,000 mark as part of one of its strongest daily gains in months. Invezz reported on Bitcoin’s strong momentum earlier today, and as is often the case in the crypto space, an article can become irrelevant and obsolete within hours.
That said, don’t break out the champagne—just yet.
This is what worries me the most. The 200 day moving average is one of my best indicators. As long as Bitcoin trades south of the 200-day MA, the bears are still in control. One break over and all bets are off.
But we have to get there first, and it won’t be easy.
The 200-day MA also roughly coincides with key resistance levels and last summer’s high when Bitcoin appeared to be launching a rally only to be met with intense selling pressure.
Many traders and analysts on Twitter seem to have a similar view, and for good reason. Call it cautious optimism, perhaps. Just five days ago, the net unrealized profit of all Bitcoins in circulation was just $2,500.
Meanwhile, both the US Dollar Index and Bitcoin are higher on Wednesday. Has this ever happened before? I don’t think so, and this could be problematic. DXY measures the strength of the US dollar versus other assets.
As investors shift from other assets to the dollar, the DXY index moves higher. There is a typical inverse correlation between DXY and Bitcoin, but that is not the case right now. I don’t like uncertainty.
