BTC/USD is trading near the 23,530.00 price as of this writing. Simply put, everything that happened with Bitcoin in the past month made a mockery of my speculative outlook. Traders who did not participate in the strong bullish trend which took place the past month should not feel bad. Bitcoin has once again surprised many speculators including myself. The price of BTC/USD is now challenging price levels last sustained in the middle of August 2022.
Rise in Value and Happy Technical Traders in Bitcoin
Technical traders who proclaimed the late December and early January price of Bitcoin as proof technical support levels were durable may be quite happy with the results produced the last month. BTC/USD started January near the 16,500.00 level and did not look backwards. Support levels were brushed aside rather briskly and incrementally BTC/USD managed to essentially break resistance.
When BTC/USD broke through the 21,000.00 ratio which had last been seen in early November, momentum was able to display solid price velocity again. The absence of strong reversals lower in January have essentially made speculators who were proclaiming an ‘end of days’ for Bitcoin to hide and take cover for the time being and wonder what will happen next. Having been proven so wrong in the past month, I hesitate to consider what will happen in February and readers cannot be blamed for being doubtful.
- If BTC/USD is able to break above the 24,000.00 level and then challenge the 25,000.00 ratio, speculators could then start dreaming of targets near 26,000.00 and 27,000.00 which were last seen in June of 2022.
- Traders who remain bearish and believe BTC/USD will again return to earth cannot be blamed, but betting against the upwards trend in the near-term may prove dangerous and expensive.
Bitcoin Traders and the Word Caution do not Mix Well
Speculators who have been brave enough to bet on higher momentum in BTC/USD have likely been rewarded. I hesitate to caution bullish speculators to be skeptical regarding the coming price velocity of Bitcoin after the positive results in the month of January. However, as a risk analyst I am hard pressed to remain quiet. BTC/USD remains a dangerously speculative asset and one that should be traded with great care.
Last month’s result do not guarantee Bitcoin will continue to soar. If Bitcoin continues to climb in value and speculators are on the correct side of the wager that will be a solid outcome for bullish bettors, but a downside reversal should be worried about too. Risk management is essential and locking in profits is important. It might be tempting to stay in a buying position if it is doing extremely well in Bitcoin currently, but if a trader cashes out a winning wager that is not a bad decision either. Simply put we have seen this show before in Bitcoin, super highs and violent reversals lower.
BTC/USD Outlook for February 2023:
Speculative price range for BTC/USD is 18,040.00 to 28,350.00
Traders who suspect Bitcoin will run out of buying power should be careful. It is not wrong to wonder where all the current buying is being generated from, but January’s upwards results are hard to argue with and perhaps dangerous to consider wagering against. If BTC/USD were to stumble below the 23,000.00 ratio and see strong velocity that challenges the 22,000.00 level this would not be surprising. However, if the 22,000.00 to 21,000.00 BTC/USD ratios hold as support, this might be viewed by some as a buying opportunity. Support levels tested below 20,000.00 may cause some bullish speculators to worry that another downturn is developing in Bitcoin and this could ignite more selling.
The question regarding who is buying BTC/USD at this time is interesting and can only be guessed upon. However, speculatively the price of Bitcoin has done well the past month and bets on more upside will likely build momentum if the current price is sustained. If BTC/USD pushes above 24,000.00 and begins to set its sights on 25,000.00, traders should prepare for a loud roar from Bitcoin backers that the world’s most famous cryptocurrency is recovering and is going to prove doubters wrong again. But again, we have seen this show before.
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