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Does dead cat bounce? Bitcoin price approaches $23,000 at fresh 5-month high

Bitcoin (BTC) took a swing at $23,000 on January 21 as Asia buyers fueled fresh market strength.

BTC/USD 1-Hour Candlestick Chart (Bitstamp). Source: TradingView

Bid liquidity creates suspicion

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD battling bears to reach $22,790 on Bitstamp overnight – the highest since August.

With new multi-month highs coming in quick succession despite fears of a major correction, Bitcoin continued to surprise as traders cleared the way for more upside.

As noted by intraday trader Skew, Asia led the way into the weekend, with selling pressure from market makers being absorbed on exchanges.

“Another rally driven by bids from Asia. TWAP buyers absorb the selling pressure from MMs. Big spot bid lifting offer & ask wall drawn before another short squeeze,” Skew commented on a composite diagram.

BTC/USD Annotated Charts. Source: Skew/Twitter

On-chain analytics resource Material Indicators in the meantime the flag ask for liquidity to be removed on Binance the day before, this allows Bitcoin’s first run beyond the $22,000 mark.

“Volatility continues. Don’t give it all back, be sure to take some profits along the way,” it wrote as part of a subsequent update.

BTC/USD order book data (Binance). Source: Material Indicators/Twitter

As always, Bitcoin was far from above suspicion at its recent highs, with some familiar faces still urging traders to prepare for the worst.

“The bigger the pump, the harder BTC will fall,” analyst Toni Ghinea tweetedwhile Crypto Tony argued that the whole move may be nothing more than a “dead cat bounce”.

“Whether this is a wave of dead cats or a reversal on Bitcoin, it’s great to see some optimism back in Crypto,” he summed up.

Considering why further gains came after the end of the week’s TradFi trading, one popular commentator additionally suggested that traders were manipulative.

“Nobody who really wants to buy and own crypto waits until Friday closes every week to execute,” an update readadding that these buyers’ “objectives are clear.”

Earlier in the week, Material Indicators had also warned of “choreographed” bidding on BTC.

BTC/USD 1-Day Candlestick Chart (Bitstamp). Source: TradingView

Important moving average on the horizon

Attention therefore focused on the upcoming weekly close for BTC/USD, which if current prices were to hold would be the best since mid-August.

At the same time, Bitcoin appeared to be about to print a so-called “death cross” on the weekly chart, with the descending 50WMA about to cross the still rising 200 WMA.

BTC/USD 1-week candlestick chart (bitstamp) with 50, 200WMA. Source: TradingView

Related: Bitcoin Faces $15,000 Crash As US Triggers ‘Financial Meltdown’ – Arthur Hayes

A key target was the 200-week moving average (WMA), currently at $24,650 and out of reach for much of 2022.

The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.