Watch out for the trap! Risk of falling into a $5,000-$12,000 range By Investing.com


© Reuters Bitcoin daily chart

Investing.com – Today, it is up 6.8%; signing a return above the key threshold of $20,000, with a price of $20,200, while the weekly gain amounts to 4.44%.

The cryptocurrency thus appears to be unstuck from the US stock market, at least in the short term, as it fell -1.03 percent and -0.51 percent yesterday.

Until 2020, the cryptocurrency market evolved independently of stock markets. But that changed with the Corona pandemic, which led to central banks and governments around the world pouring huge amounts of money into the market, money that eventually flowed into cryptocurrencies.

This is why many experts believe that the next real rally will take off only when monetary policy begins to ease. During the current tightening cycle, the central bank is withdrawing liquidity from the market, which has caused the cryptocurrency slump seen since last fall.

This matches the data from Santiment. The number of Bitcoin whale wallets hit a 29-month low. A sign that the smart money is being withdrawn. Only private investors are already preparing for the next all-time high, as the number of wallets with more than 1 BTC exceeded 900,000 for the first time.

But that could be premature as analysts like Justin Bennett believe the move down is not over yet. The descending triangle formation indicates readiness for a breakout in the area between $5,000 and $12,000.

When it comes to the sustainability of the Bitcoin blockchain, things don’t seem to be looking so good, as the Bitcoin Mining Council recently reported. The organization, which defends the rights of large mining companies, recently estimated that 59.5% of the electricity needed by mining comes from renewable energy sources.

However, a study by the Cambridge Center for Alternative Finance suggests that only 37.6% of the energy consumed comes from sustainable sources.

Bitcoin: Technical thresholds to watch out for

Yesterday, bitcoin tested the 78.6% Fibonacci retracement resistance at $19,251. Although it failed to close the day above this level, the positive momentum was reinforced today and was followed by a rally above the psychologically important level of $20,000.

The next resistance is at the 61.8% Fibonacci retracement at $20,523. If this threshold is breached on the daily close, look for more gains towards the 50 percent Fibonacci retracement of $21,417.

If the bulls fail to break above the 61.8% Fibonacci retracement and sustainably defend the 78.6% Fibonacci retracement, a move lower towards the cycle low of $17,630 is expected.

By Marco Oehrl

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