Bitcoin has been trapped in a range for a while now, and a breakout is bound to happen anytime. However, whichever direction the cryptocurrency’s price action breaks in will determine where it goes next in terms of price.
The outlook on the crypto market continues to go through a period of uncertainty as the price action becomes harder to read.
Bitcoin Price Action
The bitcoin price seems to be uncertain. Since November 2021, the price of the cryptocurrency has been in a descending channel.
Over time, bitcoin’s price action appears to have respected these lines of support and resistance and is now pushing up against the upper trendline around the $19,200 zone.
However, the bullish momentum appears weak as a noticeable lack of demand and, therefore, bullish strength from the market.
Overall, two immediate price levels act as resistances and coincide with the multi-month resistance level (blue line) around the $19,200 zone. These two resistances are the 50-period (yellow line) and 100-period (red line) moving averages on the daily timeframe.
If one considers the current market sentiment and the lack of bullish enthusiasm from the market, the price of Bitcoin is unlikely to break through these price levels, and rejection from these zones is fairly certain.
Sentiment Analysis of Bitcoin
According to a tweet from crypto analysis platform, Santiment, the percentage of all social media and internet discussions related to bitcoin has hit a low and now sits at 12%.
Santiment points out that this week’s figure is the lowest it has been in seven months. And for 10 “straight weeks,” the sentiment on bitcoin has been generally bearish.
According to Santiment, something like this could signify that a market bottom might be incoming.
IMF Hints Bad Recession
The International Monetary Fund (IMF) has come out with another warning about where the global economy might be headed.
The IMF didn’t mince words, stating in plain terms that the worst is “yet to come.” They also warned that for many people in 2023, the condition of the global economy would feel like a recession.
This warning by the IMF may signal a dip in the price of several cryptos, stocks, and metals. Because if 2023 feels like a recession, the financial markets are bound to tumble.
Historically, bitcoin has reacted rather badly to recession situations. Something similar happened in the recession with the covid-19 pandemic in 2020 and the crypto and stocks selloff in December 2021 and May 2022.
However, the US Federal Reserve may step in to reduce the effects of such a recession. The FED will most likely reduce its interest rates, leading to an upward rally in the price of bitcoin.
Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)