BTC/USD Analysis – January 17, 2022

Bitcoin Price Prediction

Bitcoin price has rebounded from a critical psychological level, indicating a return of retail interest. The recent rise lays the groundwork for a short-term foundation, allowing BTC to begin a broader leg-up. Surprisingly, on-chain data correlate with the technical bullish view. However, an upswing currently appears to be unavoidable for BTC and, by extension, the larger ecosystem.

Bitcoin has spent the week forming a particularly terrible bear trap based on a head-and-shoulders pattern. The price of Ethereum has retreated after the recent gain, but it has found support and shown some signs of buyers returning to continue the upward trend. As Ripple seeks a 20% raise, the XRP price has established an almost identical reversal scenario to Ethereum. Furthermore, the market's trading sentiment losses were further bolstered by the disappointing US economic data for December, which could further support the gold price, especially should China disappoint in today's numbers.

On the data front, retail sales in the United States fell 1.9 percent on a year-over-year basis, with sales in the control group down 3.1 percent. ANZ Bank analysts explained that the figures imply that the biggest inflation in 40 years is affecting consumer behaviour, and this might easily extend into the first quarter when the expiration of child tax credits will also weigh. As a result, manufacturing fell by 0.3 percent year on year, while industrial production fell by 0.1 percent. According to ANZ Bank analysts, "a 1.3 percent reduction in auto vehicles and parts drove manufacturing weakness." As a result, S&P 500 futures fell 0.20 percent intraday, while US 10-year Treasury futures fell further. Thus, safe-haven gold benefited from a generally negative tone in the equity markets. On the flip side, the weakness of the US dollar may be responsible for gold's continued gains.

On Monday morning, the dollar fell lower in Asia after the People's Bank of China (PBOC) announced a surprise benchmark cut. Investors are also anticipating the Federal Reserve's policy announcement in January and the timing of interest rate hikes. Meanwhile, the losses in the US dollar were also bolstered by the poor US economic data, which raised doubts over the US economy's growth. However, the US dollar's losses may be short-lived as the hawkish interest rate bolstered the dollar even as the impetus for gains began to fade. "National Australia Bank's (OTC: NABZY) head of foreign exchange strategy, Ray Attrill, said that Friday's move implies to me that the interest rate motive for dollar strength is still alive and well. It may not necessarily return to push the dollar to new highs, but "we've had a hawkish twist out of every Fed meeting since June 2021.

BTC/USD Intraday Technical Levels

Support Resistance

41788.5 43881.2

41014.9 45200.3

39695.7 45973.9

Pivot Point: 43107.6

BTC/USD - Technical Outlook

Bitcoin's price continued to rise beyond the $44,000 resistance level. BTC even surpassed the $44,200 mark before being confronted by sellers. A high was made near $44,400, and the price began to fall again. There was a clear move below $43,500 and $43,200. The price even fell below the $42,500 support level and came dangerously close to the 100 hourly simple moving average. Before the price began to rise, a bottom was made at about $41,800. It reached a high of $43,791 and is now consolidating. The bitcoin price is currently trading below $43,500 and the 100 hourly simple moving average.

There is immediate support near the 50 percent Fib retracement level of the recent advance from the $41,800 swing low to the $43,791 high. On the hourly timeframe of the BTC/USD pair, a significant contracting triangle is emerging with resistance near $43,200.

On the upside, an early resistance level is near $43,200. The next significant resistance is located near the $43,500 level. A decisive rise above $43,500 might push the price towards the $44,000 resistance level. Any more increases may need a challenge of the $44,200 resistance level. The next significant stumbling block is around $45,000.

If Bitcoin does not begin a new upward trend over $43,500, it may begin a new downward trend. On the downside, there is immediate support near $42,800. The first significant support is evident at about $42,500. It is approaching the 61.8 percent Fib retracement line of the latest rise from the $41,800 swing low to the $43,791 high. If the price falls below the $42,500 support zone, it may move towards the $41,800 barrier.