Bulls in Bitcoin Approach $28,000 as Trader Says ‘Big’ Buyer Must Step In

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22 Jan 2024

Introduction:

Bitcoin continues to face resistance around the $28,000 mark as traders assess the cryptocurrency’s performance amid geopolitical uncertainty. In this end-of-week analysis, we delve into the recent developments in the Bitcoin market and explore the challenges it faces in breaking through this key resistance level.
BTC/USD 1-hour chart. Source: TradingView

Bitcoin’s Weekend Performance:

Over the weekend, Bitcoin managed to avoid significant downside volatility after recovering from a retest of the $27,000 level on October 6. This recovery was driven by unexpected employment data in the United States, which diverged from the Federal Reserve’s policy changes. As the week begins, market participants are closely watching the $28,000 resistance level.

Low Timeframe (LTF) Analysis:

Popular trader Skew, in a low timeframe analysis of exchange order books, highlighted that substantial buying power is still needed to turn $28,000 into a support level. Skew noted, “So on LTF we can see clearly the market is still trading $28K as resistance. Going to require a big spot buyer to crack that area imo.” Additionally, he mentioned that “perps are shorting every LTF bounce into $28K as well.”
Bitcoin order book data. Source: Skew/X

Bitcoin’s Reaction to Key Levels:

Skew described Bitcoin’s reaction to both the $28,000 level and the 200-day moving average, currently at $28,040, as less than ideal. Fellow trader Daan Crypto Trades cautioned against shorting Bitcoin in case of a sudden breakout, as such breakouts tend to lead to further upside moves. Daan Crypto Trades also emphasized the importance of monitoring the closing price of CME Bitcoin futures markets, as it can act as a price “magnet” and influence trading strategies.
BTC/USD annotated chart with CME Bitcoin futures data. Source: Daan Crypto Trades/X

Geopolitical Instability as a Catalyst:

Amidst recent events in Israel and growing global uncertainty, analysts like Michaël van de Poppe, founder and CEO of trading firm MN Trading, foresee potential catalysts for Bitcoin’s price. Van de Poppe suggested that Bitcoin may continue its upward trend and possibly reach $30,000 in the face of worldwide uncertainty. He had previously predicted a move beyond $30,000 in October, historically one of Bitcoin’s strongest months.
BTC/USD monthly returns (screenshot). Source: CoinGlass

Conclusion:

Bitcoin’s journey towards breaking the $28,000 resistance level remains uncertain, with traders closely monitoring market dynamics and geopolitical events. While some anticipate a potential breakthrough, caution is advised in the face of possible weekend breakouts. As the crypto market continues to evolve, investors should conduct thorough research and consider the associated risks before making investment decisions.
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Written by Shantanu Gupta

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