The analysis concludes that Bitcoin is still in line for a breakout as short-term weakness pushes the BTC price below $22,500.
On January 25, Wall Street saw weakness in the opening as US equities fell step-by-step.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
BTC prices are facing stiff resistance
Data from Cointelegraph Markets Pro and TradingView shows that BTC/USD has fallen below $22,500 after failing to crack resistance near five-month highs.
U.S. stocks got off to a weak start to the session, with the S&P 500 and the Nasdaq Composite index down 1.1% and 1.6%, respectively, at the time of writing.
The bitcoin bull itself has faced trouble, trying to push into the liquidity zone of more than $23,400, it has been unchallenged so far and home to quite a number of smaller liquidations has been the case
Essentially, traders stayed on the fence, hoping for a clear trading signal after a few days of sideways price action.
“This is what we are now looking for with a corrective wave in Bitcoin, followed by another leg to our total of $25,000,” Crypto Tony commented alongside an explanatory chart
“If you start breaking down from here, you’ve failed.”
BTC/USD Annotated Chart. Source: Crypto Tony/Twitter
Cointelgraph contributor Michael van de Poppe was also opting to wait and see that day.
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“Patiently waiting for bitcoin to drop below $22.3K or break $23.1K and recover. I don’t see a very interesting setup in between,” he told his Twitter followers.
Some optimistic tech remained, including Crypto Aid, which saw potential higher lows for BTC/USD setting the stage for new highs.
Fellow trader Kaleo also suggested that $30,000 would be the next bitcoin target.
Bitcoin correlation to the gold boom
Meanwhile, points of interest beyond the price action focused on bitcoin’s correlation with gold and stocks.
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Charles Edwards, CEO of crypto investment firm Capreol, noted that bitcoin continues its historical trend of playing “catch-up” with gold.
“Bitcoin and gold are connected, and gold is pumped,” he wrote.
“When you follow the price of gold, it’s easy to see. Bitcoin tops between 0-6 months after gold and bottoms between 0-3 months after gold. These differences are predictable and will likely close over time.”
BTC/USD vs XAU/USD Annotated Chart. Source: Charles Edwards/Twitter
Bitcoin’s correlation with gold was practically 100% that day.
BTC/USD vs XAU/USD chart. Source: TradingView
In contrast, Kaleo expected a “decoupling” from the S&P 500, where bitcoin was primed to separate at the top.
The tweet continued, “BTC November ’21 ATH exploded above HTF resistance ~two weeks ago.
“It looks like it’s going to continue that trend as it’s on the verge of breaking the pennant accumulated in support up there right now.”
BTC/USD vs S&P 500 Annotated Chart. Source: Kaleo/Twitter
The views, opinions and opinions expressed herein are those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph