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Bitcoin has a ‘mountain to climb’ but signs show there is ‘light down the tunnel’

Bitcoin has a ‘mountain to climb’ but signs show there is ‘light down the tunnel’

As the chaos in the cryptocurrency market, induced by the collapse of the crypto trading platform FTX, begins to calm down, the price of Bitcoin (BTC) has started to move in a sideways pattern, but there is still hope for recovery in the long term.

Indeed, Bitcoin has been moving in a falling wedge since the June low, and to break to the upside, it needs to move beyond the one-day MA200 (moving average), which should enter the falling wedge by the first week of January, according to the TradingView analysis by recognized crypto experts at TradingShot on December 21.

Furthermore, the analysts explained that Bitcoin needs to climb a difficult mountain:

“Only then, after breaking this trend-line that has been intact since December 31, 2021, can we expect Bitcoin to turn bullish long-term. Until then, the top (lower Highs trend-line) of the falling wedge poses as the next rejection point/resistance.”

Is there place for optimism?

Meanwhile, there is light at the end of the tunnel in the form of the U.S. Dollar Index (DXY), which has been declining significantly since September 26, and “even though (…) they have a negative correlation, Bitcoin broke this after the FTX crash.”

As the experts added, once the crypto market gets past the FUD (‘Fear, Uncertainty, and Doubt’) caused by the dollar’s dropping value, it “will shoot up aggressively to cover the lost ground to the upside.”

Bitcoin price action analysis and prediction. Source: TradingShot/TradingView

In the meantime, Mike McGlone, a commodity strategist at Bloomberg Intelligence, has projected that Bitcoin was likely to see “a warm spell” and resume its rally, potentially resuming its inclination to outperform the financial markets, as Finbold reported earlier.

The optimistic predictions arrive as the maiden cryptocurrency is recording positive results in terms of its 180-day forward returns in the fourth quarter of 2022, exceeding historical performance when taking into account all datasets since its inception.

Bitcoin price analysis

At press time, Bitcoin is changing hands at the price of $16,885, recording a modest gain of 0.47% on the day, while its weekly losses stand at 5.27%, compared to the 5.05% increase on the monthly charts, as per data retrieved by Finbold on December 21.

Bitcoin 7-day price chart. Source: Finbold

With a market capitalization of $324.87 billion, Bitcoin remains the largest crypto asset by this indicator and, together with its runner-up Ethereum (ETH), continues to push the entire crypto market cap upwards, as recently observed.

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