Bitcoin, the reputed crypto king, is expected to lead the crypto market boom in 2023. As of this writing, BTC is trading at $23,707, allowing the alpha coin to regain its August 2022 support level of $22,722. This caused crypto Twitter to erupt with excitement as analysts turned bullish on BTC, with some establishing huge targets for the end of the year.
However, there are observers who view the current surge with severe caution. Due to the fear, uncertainty, and doubt currently surrounding Bitcoin, this surge could be interpreted as a bull trap, setting up many long position holders for losses in the long term. With the current positive momentum, though, BTC may still have room to advance toward $25,000.
Can Bulls Take Bitcoin Price To the $25K Level?
As Bitcoin surpassed $23,000, CoinGlass data indicates that a total of $29.64 million in short positions were liquidated across all exchanges. This may seem minor in comparison to the $141 million in short position liquidations on January 14, but these liquidations may drive some bears to go long if Bitcoin increases further.
According to CoinMarketCap, as of the time of writing, the king of cryptocurrencies has already risen 42%. This could continue since macroeconomic conditions are gradually improving. In the short to medium term, the leading cryptocurrency may incur losses as the positive momentum wanes. As of the 30th of January, BTC bulls appear weary.
If this decelerating momentum persists, the coin may return to its present support level of $22,622. This support should be able to withstand a strong bearish momentum if it ever occurs. Additionally, investors and traders must monitor the movement of equities. The International Monetary Fund’s 2022 analysis of the relationship between cryptocurrencies and equities demonstrates a substantial association between the two asset classes.
At the time of writing, Bitcoin has a significant association with key technology stocks like Apple and AMD. However, indices such as the S&P 500 and the Dow Jones have a lesser correlation. However, the correlation between Bitcoin and stocks makes Bitcoin sensitive to macroeconomic problems. Due to investors’ skepticism in spite of the market rise that began this year, Bitcoin may experience volatility in February.
