Bitcoin price continues to trade in a tight range around $16.7k as investors continue to assess the outlook for monetary policy and economic growth in 2023. The week is crucial as traders await Tuesday’s US manufacturing PMI, Wednesday’s latest Federal Reserve meeting minutes and Friday’s December jobs report.
Meanwhile, the US Dollar Index (DXY) is up 0.63% on Tuesday and climbed back above 104. Hence, volatility can be seen in the crypto market this week that will determine the direction of bitcoin price in the coming weeks will.
The entire crypto market volume increased 14.02% in the last 24 hours. Bitcoin price will remain under pressure this week while most of the bullish push will come from altcoins.
On-chain data signals a bullish scenario for bitcoin price
According to on-chain analysis, Taker Buy/Sell Ratio (30DMA) data generated another buy bitcoin signal on Jan. 2. This is the fourth time the metric shows a buy signal.
Bitcoin – Buyer Buy/Sell Ratio (30DMA). Source: CryptoQuant
The Taker Buy/Sell Ratio (30DMA) is one of the best metrics for identifying a buying cycle. However, this is only true in a bull market. In times of instability or bear markets, this indicator generates sell signals almost exclusively. Therefore, one needs to confirm the buy signals with other short-term on-chain indicators according to the trading strategy.
As the Taker Buy/Sell Ratio (30DMA) generated buy signals for Bitcoin four times during the bear market. Russia’s invasion of Ukraine, the Terra LUNA crisis and the collapse of FTX only had a negative impact on bitcoin price action in 2022.
However, the fourth buy signal is likely a bullish call as BTC-SOPR-MA30 data suggests that the likelihood of BTC price turning bullish in 2023 is quite high. Investors can employ the DCA strategy to accumulate Bitcoin at lower levels as experts believe institutional investors and whales will rally at any time.
Can Bitcoin Go Bullish Now?
Popular analyst Michael van de Poppe believes that bitcoin price could surge above $17,000 in the coming days. BTC price will continue to hold strong above the crucial $16.5K support level.
Bitcoin price in a 1 hour time frame. Source: Michael van de Poppe
According to the technical indicators, BTC price action is increasing in Bollinger Bands Squeeze and RSI. Thus, BTC price will continue to move sideways until the squeeze ends.
Also read: This bullish pattern strengthens BTC to break out of dormant market conditions
Varinder is a technical writer and editor, technology enthusiast, and analytical thinker. Fascinated by disruptive technologies, he has shared his knowledge of blockchain, cryptocurrencies, artificial intelligence and the Internet of Things. He has long been associated with the blockchain and cryptocurrency industry and is currently reporting on the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.