Bitcoin Price Plays Catch-Up, Why $28,000 Is A Key Level
The Bitcoin price is finally seeing some profits, but it seems weak compared to other crypto assets. The macroeconomic environment is waking up, shaking things across all asset classes.
As of this writing, the Bitcoin price trades at $16,800 with sideways movement in the last 24 hours. In the crypto top 10, BTC is lagging behind Ethereum, Binance Coin, and Cardano. These cryptocurrencies are positively reacting to the start of 2023.
Bitcoin Price Aims For Higher Levels
Per a recent report from the trading desk QCP Capital, institutions are returning to action and allocating capital in Gold and other assets. The precious metal has seen a 15% rally in the past 60 days and keeps trending upwards.
The trading desk believes institutions are allocating into “alternative assets” or stores of value. The Bitcoin price is yet to benefit from this trend, but the crypto market is recording some profits. In particular, the non-fungible token space.
This sector is coming back to life after months of declining activity. Popular NFT collections experienced 2 to 3x profits in late 2022 and are likely to maintain the trend. QCP Capital noted Bitcoin and Ethereum’s price action:
(…) in line with Gold and NFTs, BTC and ETH are playing catch up to some extent at the start of the year. Despite the mini rally, BTC is still trading in an extremely tight falling wedge – with 18k the key breakout level to the topside.
If the Bitcoin price can flip $18,000 and trend higher on the back of institutional allocation to alternative assets, the cryptocurrency could reclaim higher levels. The trading desk points to $28,000 as a critical level to watch.
This level is the neckline of the “Head and Shoulders” pattern formed by BTC in the past two years. In addition, $28,000 has confluence with the 61.8% Fibonacci Retracement level, meaning many players will keep an eye on it.
What Could Operate As An Obstacle For Bitcoin
In the short term, the Bitcoin price is seeing resistance at its current levels. Analyst Caleb Franzen claims that BTC is likely to continue seeing resistance around these prices and higher.
In 2022, the levels at $17,000 operated as critical support. Once lost, these levels turned into significant resistance, likely creating friction for the cryptocurrency. As the analyst pointed out, Bitcoin was already rejected from these levels in an attempt to rally beyond the $18,000 mark. Franzen said:
Bitcoin is decisively within a potential resistance range. Even if price manages to break above this diagonal resistance channel, we can’t ignore overhead resistance from the former 2022 support range. We’ve already been rejected there once…