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It’s fair to argue that 2023 will be remembered as a watershed year for bitcoin, one marked by increased attention from mainstream investors and a seismic shift in the perception of digital assets. Once viewed as a speculative novelty, bitcoin has evolved into a popular component of diversified portfolios, drawing interest from global financial institutions.
A year ago, the bitcoin price was sitting at $16,837. Over the following 12 months, the flagship cryptocurrency staged a 160% comeback. Several factors helped BTC orchestrate its impressive recovery, but can it sustain the momentum in 2024?
Please, enjoy this 2023 special and we wish you a Happy Holidays!
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State of the System
As always, let’s pick it up since the last week's Uncharted:
“Bitcoin and the overall market experienced a notable surge on Thursday following a surprisingly strong signal from Federal Reserve officials indicating potential interest-rate cuts in the coming year. The price of Bitcoin, in particular, saw a 4.1% increase over the last 24 hours, reaching $42.869k, although it remains slightly below its recent peak of $44k.”
Bitcoin commenced 2023 just above $16k, but defied expectations as the year unfolded, surprising investors who had previously dismissed the crypto market. By the beginning of December, bitcoin reached a 12-month high of $45k.
The momentum persisted throughout the year, receiving an additional boost from BlackRock's BTC exchange-traded fund (ETF) application and the subsequent surge in institutional interest in the cryptocurrency market. Bitcoin's ascent from $16,000 to nearly $45k in a single year reflects a remarkable 180% gain, highlighting its potential for resilience even in the face of significant global challenges as we finish the year in the bullish quadrant.
The anticipation is that a breakout in the $43-$44k range for bitcoin will signal a continuation of the upward trend, with a potential retest of $38k offering an attractive entry point for swing traders. It's noted that the current low volume in the market might pose a risk, suggesting that if there is a breakout, it could potentially be a fakeout leading to a retest of the bottom of the range.
Looking ahead, the early January timeframe, coinciding with an ETF application and the holiday season, is expected to introduce increased volatility to the market.
Bitcoin's upward momentum has slowed down upon encountering the crucial $45k resistance zone. This level aligns with the upper boundary of an ascending channel, resulting in a period of price stabilization and sideways movement. Presently, bitcoin is trading within a critical range, bounded by the $45k resistance and robust support at $40k. The market is expected to sustain this consolidation pattern in the short term, as the Risk Signal Remains stable at 0.
After facing challenges in surpassing the $700 billion mark for an extended period, the altcoin market cap has successfully retested its recent breakout, currently standing at around $745 billion. Drawing on the established four-year crypto cycle influenced by bitcoin halvings, there is anticipation for a substantial surge in altcoin market capitalization, with projections exceeding $2 trillion within the next 24 months. The Altcoin Signal remains in thee altcoin dominance area, with recent spikes; we are not far of the awaited altcoin season.
The standout performers in this recent altcoin surge are SOL (Solana), priced at $98, and AVAX (Avalanche), priced at $45.
Examining the 4-hour chart, it becomes apparent that bitcoin, following a rapid ascent to the $45k level, has entered a phase of sideways movement. This consolidation period is characterized by a sideways wedge pattern, with the price fluctuating within its upper and lower boundaries. Should the price break above the upper threshold of the wedge, there is potential for a renewed push towards the $45k resistance level. The bullish perspective is supported by the Relative Strength Index (RSI). However, for the uptrend to persist, it is crucial for Bitcoin to find higher support at $44k.
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