Bitcoin (BTC)Crypto NewsEthereum (ETH)

This needs to happen for Bitcoin and Ethereum to see a bullish 2023

The year 2023 begins for Bitcoin and the broader crypto market better than last year. Even though most crypto prices are still trading in a very low, tight range, BTC is showing at least a 1.55% year-to-date performance and Ethereum of 4.5%.

However, as QCP Capital writes in its latest market analysis, there are early signs that should warn crypto investors. While gold prices are currently extremely strong, the trading house has questioned whether this will continue if the expected wave five of the USD rally based on Elliott Wave theory materializes.

According to the theory, the fifth wave is the final stage in the direction of the prevailing trend. And a resurgent USD could mean further price losses not only for gold but also for Bitcoin and crypto. It remains to be seen whether this will also have an impact on the other alternative asset classes, according to QCP Capital.

Currently, total liquidity in the market, as measured by annual M2 growth, has shrunk to 0% for the first time in history. “Not to mention the liquidity within crypto itself, which is an even smaller factor,” the company notes based on the chart below.

7/ And overall liquidity as measured by M2 growth yoy has shrunk to 0% for the first time in history! Not to mention the liquidity within crypto itself which is an even smaller factor of it pic.twitter.com/grwcAdPLn6

— QCP Capital (@QCPCapital) January 4, 2023

Price targets for Bitcoin and Ethereum

Nevertheless, Bitcoin and Ethereum are in a kind of catch-up rally similar to gold at the beginning of the year. Despite the mini-rally, BTC is still trading in an extremely tight falling wedge, with 18,000 being the key breakout level to the upside, according to the company.

In the medium term, $28,000 is becoming increasingly important – as a head and shoulder cut and 61.8% Fibonacci-Retracement level from the $3,858 low in 2020 to the $69,000 high in 2021.

This needs to happen for Bitcoin and Ethereum to see a bullish 2023, Crypto Trading NewsBitcoin/USD, 1-day chart

According to QCP Capital, Ethereum “remains significantly more bullish than BTC” even though ETH is also trading in a consolidation pattern. Investors should keep an eye on the top of the triangle at $1,400 for now before targeting the key $1,700-$2,000 resistance zone. On the upside, the firm expects $1,000 to $1,100 to be very good support.

This needs to happen for Bitcoin and Ethereum to see a bullish 2023, Crypto Trading NewsEthereum/USD, 1-day chart

The macro outlook for 2023

The macro environment is likely to be decisive in determining whether 2023 will be a continuation of 2022. QCP Capital believes that the inflation will fall significantly in the US, but not enough to meet the Fed’s 2% target.

This will prompt the Fed to delay rate cuts for as long as possible as Jerome Powell doesn’t want to be the one responsible for making the same mistake as in the 1970s and 80s when there was a “double dip inflation era”.

This will cause the Fed to develop a “blind” mentality to the far better numbers and make another mistake by easing monetary policy too late. “In a sad twist of fate, they will again have to wait too long and go back to full steam,” the company claims, concluding:

We assume that this could again only be the case in October/November this year, but remain open to an earlier bottoming out of the markets.

At press time, BTC price is at $16,847 and has seen a slight gain of 0.59% over the past 24 hours.

This needs to happen for Bitcoin and Ethereum to see a bullish 2023, Crypto Trading NewsBitcoin price, 4-hour chart Featured image by Pierre Porthiry-Peiobty / Unsplash, charts by QCP Capital (Twitter) and TradingView.com


Source: Crypto News Deutsch

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button