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Bitcoin (BTC) went below $30,000 after a few weeks of potential consolidation over the mark, which disappointed bullish traders. BTC had shown signs of further rallying in the previous week, but analysts had predicted a $30,000 retest. Long-term bulls show no signs of fatigue, as the fundamentals of BTC (like wallet address growth etc) remain solid for the year ahead. But what could have led to Bitcoin sliding down as the week began?
<source: coinmarketcap>
Last week, BTC had crossed $31,000, which could have prompted traders to book profits. It led to BTC slowing down and coming near to the $30,000 level yet again. At this stage, analysts said the retest could occur around the $30,000 level. Bulls stared in dismay at the prediction, probably due to their long positions above Bitcoin’s $30,000 mark. At this juncture, traders could be seen reentering the market and taking bullish positions on Bitcoin, which could propel the crypto to end the current week at higher levels.
Analysts agree the current movement for Bitcoin was what they had exactly predicted. They remained optimistic about its upcoming trends, with their opinions in line with long-term BTC bulls. For now, Bitcoin’s resistance would form at $30,000 while its key support forms around $29,700 for the short term. A major reason for caution could be the decreasing number of Bitcoin wallets having large deposits. While it did not indicate any immediate reason for caution, one might note that the number of such wallets is correlated with the sentiments of the crypto market.
On the macroeconomic front, inflation showed signs of cooling down, which could lead to central bankers slowing down with their interest rate hikes. This could provide the much-needed liquidity requirement to the crypto market and contribute towards its rally in 2023. Recently released data from many sources across the United States also leads to a favorable overview of the jobs market, with unemployment decreasing.
With a recovering economy and support from bulls, BTC could again convert $30,000 as support once again in the coming week and aim to cross its earlier resistance at $31,000. The current downward trend could be temporary for all we know. BTC’s seven-day average returns was over 8%, while its 24-hour volumes decreased to just above $10 billion. Its market capitalization was dominant in the crypto market, having around $585 billion out of the $1.3 trillion market.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.