Right off, we can note that the rise is actually pretty meager in the context of the fall. We have just about managed to get past the two short-term lines of the Ichimoku (TS and KS lines), and so, that is just deemed stage one of the rise. Much to do before we can talk about bigger gains ahead. For starters, the move has to at least sustain to create a positive crossover of the TS over the KS line. This will be the first confirmation of bullish intent. The prices, if they continue higher, would probably find resistance at the Kumo that is present around 20% higher from where we are trading currently. That is the zone corresponding to some supply/demand zones created on the way down. So, the short-term target we are looking at would be in the zone of $27,300-28,300.
On the weekly chart shown here, we can note that the RSI indicator is headed higher and is supportive of price advances in the future. But if we look at the RSI on the daily chart, one finds it in deep overbought territory (86 levels) and this may hint at some short-term pullback or consolidations ahead. The fact that the CS line of Ichimoku is now entangled in the prices would suggest that we may see a couple of weeks of corrective move ahead. But the daily chart shows high trend strength and hence, any price damage in a correction may perhaps be limited to say around $20,500 area.
We need to be tracking that fall for evidence of completion because it will represent a buying opportunity in BTC ahead for targets mentioned earlier at near $28,000 area. It will also be very important to gauge how the prices handle that next resistance zone because a crossing of this zone can be quite bullish for the trends as the next zone of resistances lie a good distance away (around $39,000). Thus, we are looking at an overall bullish situation for the cryptos in the coming months!
On chart 2, I have also drawn a proprietary resistance trendline using Ichimoku methods and we note that the prices are on the verge of crossing this trendline. Doing so will push the trend status to up in the intermediate term.
This should not be misunderstood to mean that prices would continue at the same pace as seen so far. I have already mentioned about the possibility of some consolidation. Note on the charts that the Kumo is a rather thick one and it is going to take some time for prices to work up the kind of upside momentum required to breakout past the cloud. There has to be a great consistency to the news flow for that to happen in the near term. So, we need to caveat the above statement about bullish times by adding that while the trends may remain bullish, there may also be several phases of consolidations in the short term.
A question one could ask is, what if the support at 20,500 does not hold? Well, that is possible and we can then keep levels around $19,800 (current KS line level) as being the next target. If prices start reacting, then we would find the KS line may continue to advance, so the support zone of the KS line may be a rising one.
It is my firm belief that the lows recorded back in November 2021 ($16,800 area) is a very durable low and hence, unlikely to break across 2023. This encourages me to consider any decent dip in the crypto leader’s prices during this year to offer multiple buying opportunities. As the matter stands today, Bitcoin should be one of the assets that I suggest should be traded actively through the year.