Bitcoin may reach R730k before seeing a "severe correction"
BTC price action is declining on the day, but strength exists beyond the short term, according to Michael van de Poppe.
Bitcoin's price is falling together with the value of US stocks.
BTC/USD fell to a daily low of R444K on Bitstamp, according to data from Cointelegraph Markets Pro and TradingView. Bearish signs were already circulating for the pair after its most recent effort to flip R456K to support was met with rapid rejection.
With concerns about whale movements on exchanges, Material Indicators monitoring resource found that the 200-week moving average (MA) of around R458K needed to become support for Bitcoin to change its long-term trend.
"IMO, this is still distribution in a bear market rally until we see full candles above the 200 WMA, and with the bid wall over R438K, shorting from this level has about as much short-term risk as longing," stated part of the comments in its latest Twitter update.
Before the Wall Street open, an accompanying chart of the Binance order book indicated liquidity was moving closer to spot pricing. However, Caleb Franzen, senior market analyst at Cubic Analytics, predicted a bearish outlook for the S&P 500, with risk asset performance continuing to weigh on crypto.
"The S&P 500 is gapping lower, trading decisively below my R74K line in the sand," he wrote alongside a day's chart.
"A retest of the 200-day moving average cloud, which will be a critical support level, is likely." At the time of writing, the S&P 500 was down 1.3%, while the Nasdaq Composite Index was down 1.7%.
Despite being widely inversely associated with stocks and crypto, the US Dollar Index (DXY) took a knock at the open, falling to 103.77 before recovering. "USD higher highs and lows have held through much of February. 103.82 as support in DXY, current upper-low," trader and strategist James Stanley wrote in a commentary.
Stanley also mentioned the Federal Reserve's Federal Open Market Committee (FOMC) minutes as a potential market catalyst. The minutes, which are due on February 22, reflect the February FOMC meeting, at which the Fed hiked its key interest rate by 25 basis points.
The Bitcoin price declines have been "quite modest."
Nevertheless, Michael van de Poppe, CEO and founder of trading firm Eight, was convinced that the recent dip would be brief.
Michael told his Twitter followers that markets are correcting, which is great for those looking for entry places. He said we might go down a little more before turning around and need a week of consolidation before we continue.
"The FOMC minutes will be released tomorrow as well." "Remember that Bitcoin is still a great investment," he said.
According to van de Poppe's chart analysis, BTC price action is functioning within a narrowing wedge construction, with a major area of support below stretching to R411K.
His longer-term projection the day before called for higher highs before a more significant decline, which would still lead Bitcoin back to R365K.
"Corrections are still relatively shallow." I believe we will continue to rise toward R639k–R730k before a sharp fall, possibly to R365k–R456k. "Maximize profits, begin allocating to $USDT as we rise, and purchase on the correction in the second half of 2023," he said.
