Bitcoin’s price is back above $28,000 today.
At the beginning of 2023 it had risen above that threshold for the first time only about ten days ago, and had remained there for about a week, with a brief excursion below between Wednesday 22 and Thursday 23 March.
However, by Monday it was even back below $27,000 when news of the CFTC’s lawsuit against Binance was published.
Short positions had probably taken over at that time, partly because it was feared that the lawsuit against the world’s largest crypto exchange could cause serious problems for the entire crypto market.
Instead, it turned out to be less serious news than expected, affecting specifically only derivatives trading, and only in the US.
Yesterday, however, the price of BTC was struggling to hold the $27,000 mark, but in the evening it broke the $27,200 ceiling, and then overnight broke that as well at $27,400.
On the wave of that momentum, it then managed not only to get back above $28,000, but also to break above $28,600.
It then dropped a bit, beginning to oscillate in a very narrow band between $28,200 and $28,500.
With tonight’s spike it has blown out many short positions, apparently totaling over 1,500 BTC (over $42 million).
The assumption is that between Monday and yesterday many new short positions were opened caused by the spread of some negative sentiment, which instead was then completely wiped out today, along with those same short positions.
The next target for the USD price of Bitcoin (BTC)
Not forgetting that a new drop below $27,000 is still possible, it seems that the new short-term target is not only to break the $29,000 wall, but perhaps also to try to get back above $30,000.
These two thresholds have important value especially at the historical level, that is, over the medium to long term.
In fact, they are the level around which Bitcoin’s price fluctuated last year in May after the implosion of the Terra/Luna ecosystem.
In early May 2022, the price of BTC was just under $40,000. However, when suddenly the entire Terra/Luna crypto ecosystem based on the UST algorithmic stablecoin imploded, Bitcoin’s price suddenly plunged just above $25,000.
However, after a few hours it rebounded, and ended up lateralizing for about four weeks precisely in a range between $28,500 and $32,000. In those days the key threshold around which Bitcoin’s price fluctuated was precisely $30,000.
For now, in early 2023, the price of BTC has still never managed to get back above $29,000, so the first target in the short to medium term should be this. As a matter of fact, it has already attempted to approach this threshold twice, shortly after mid-March, but without succeeding. Tonight it tried a very timid third attempt, but failed to get even to $28,700.
Since it remained above $29,000 for several days in late May 2022, any recovery of that threshold would mean the total recovery of all the losses accumulated since June onward, namely since the failure of Celsius and then FTX.
At that point $30,000 could be within reach with a little additional effort.
The 2023 trend
It is worth noting that today’s recovery was 6% from Monday’s weekly lows, and the current level is 44% higher than the monthly lows of 10 March.
In addition, since late 2022 the price of Bitcoin in USD has risen by 70%, making it clear that the trend at this time in history is one of growth.
By now it is possible to say that the bear market of 2022 is over, ending around mid-November with the descent around $15,500. Even though it is by no means possible to rule out the possibility that another bear market may be triggered sooner or later, there has been a clear and sharp rebound since then that suggests that the current trend is upward.
For this reason, it is not unreasonable to imagine that it could put in some more effort, and even return above $29,000 or $30,000 thus ending the slow recovery of the losses accumulated from June 2022 onward.
In other words, leaving out what happened in the first five months of 2022, from June onward there have been five months of bear market, followed for now by a month and a half of lateralization, and almost three months of growth. During these last three sparse months of growth, all the losses accumulated during the five months of bear market in the second half of 2022 have been recovered.
However, it is important not to forget that 2022 began with a price of about $48,000, and in the first five months of the year the loss was nearly 40%. For now it seems impossible to assume a recovery of those losses any time soon.