This week in crypto has been marked by a solid performance from layer 1 (L1) tokens, particularly Cardano (ADA), Avalanche (AVAX), and Algorand (ALGO) in the top 100 coins. With double-digit gains crossing the 30% mark, the L1 tokens are rising as Bitcoin scales a new 52W high in 2023.
The steady hand of Bitcoin (BTC) has been the wind beneath the altcoin market’s wings. BTC’s price is steady, enabling a favorable environment for capital to flow into alternative cryptocurrencies.
The technical analysis of Bitcoin’s price movement provides additional insights into market behavior. On the chart, BTC’s price trajectory showcased a robust uptrend, surpassing key resistances to challenge th next psychological mark of $45,000.
Bitcoin’s price peaked at around $44,729, encountering resistance that resulted in a potential ‘double top’ pattern, a setup often indicative of a forthcoming downtrend. The chart highlights a possible pullback area in which the price might experience a reversal.
However, the buyers paint a picture of a consolidation range, which completes a bullish flag pattern and teases a trend continuation. Teasing a bullish break, Bitcoin may shortly overcome the $45,000 barrier next week.
Amidst Bitcoin’s rally, short traders felt the squeeze as bearish bets went awry, culminating in approximately $160 million in liquidations over two days. This squeeze likely fueled Bitcoin’s ascent from $39,000 to $44,000, illustrating the volatile interplay between market sentiment and price movements.
Economic Data’s Effect on Bitcoin
This week’s U.S. economic data played a pivotal role in the crypto market’s narrative. The stronger-than-anticipated job growth in November and a declining unemployment rate briefly shook Bitcoin’s price, causing a minor retracement to $43,500.
The traditional markets reacted as well, with Treasury yields climbing, reflecting a shift in investor sentiment that could spell a pause or a modest rollback in Bitcoin’s recent gains.
If this occurs, the price could retract to $42,000, serving as the first line of support, followed by the 50-day EMA at $37,263, should the correction deepen.
The weekly roundup paints a picture of a vibrant crypto ecosystem, with altcoins like Cardano capturing investor interest and Bitcoin’s price action drawing scrutiny from a technical analysis standpoint. The broader economic indicators continue to exert influence on crypto, as seen in the immediate impact of U.S. job data on Bitcoin’s price.
Meanwhile, the technical chart analysis suggests traders and investors might prepare for potential volatility with a watchful eye on crucial EMA levels for strategic decision-making. As always, the market’s complexity requires a blend of technical and fundamental perspectives to navigate the ever-changing crypto waters.