Bitcoin Price Explodes Over $20,000: Now Big Bull Run for BTC?

Over the past few days, the price of Bitcoin has recorded a huge upward trend, which has accelerated significantly recently. Thus Bitcoin was able to recapture the important psychological mark of $20,000 and continued its parabolic movement unabated. At the time of publication, BTC/USD is trading in the $21,000 range, reaching its highest levels since early November 2022.

Will this trend continue now and is the start of a major bull run like in 2021? Or is it just a large-scale bear trap before the next correction begins? Kryptoszene.de explains the current situation of Bitcoin and the crypto market and uses the technical chart analysis to show which scenarios are now possible for a further Bitcoin trend.

The price of Bitcoin has already risen 27 percent in 2023

What is certain is that the year 2023 has started very well for cryptocurrency investors so far and the trend in this trading week in particular should raise hopes among many Bitcoin buyers that there is a long bear market 2022 has now come to an end with further price gains. will continue. BTC/USD was still trading at around $16,500 on January 1 and has recorded an increase of more than 27 percent in just 2 weeks.

The huge force with which the price has increased in the last few days is remarkable. In just three days, Bitcoin rose to more than $3,500, which was about 20 percent of the year’s total gain in that short period of time. This can be clearly seen in the Bitcoin chart with the large green daily candles. BTC/USD has not seen such an upward movement in a long time. While prices have continued to rise for a few days over the past few months, the rise has been much less explosive overall and has been quickly halted by the bears.

Memories of Bull Run 2021 are evoked

A price increase of this magnitude cannot be found at all in the last year. So you have to look back to the bull market of 2021, where Bitcoin was able to record such parabolic trends for weeks. Is this a good sign that we are already back in a new bull market and that the price found the bottom of the market around $15,500 on November 21st?

At least there are indications that could speak for it. Because Bitcoin not only managed to recapture the important $20,000 mark, but the entire economic environment brightened in 2023. This can be seen, for example, in the inflation falling significantly in the most important market, the United States America, where the inflation rate has recently fallen to 6.5 percent, as reported by kryptoszene.de. Not only the crypto market benefits from this, but also share buyers. Whether the German stock index Dax or the American stock exchanges such as the NASDAQ and the S&P 500 – they are all posting strong gains these days, which could quickly forget the crisis of last year.

Has the FTX accident already been forgotten?

But is the crypto market really solid enough to start a sustainable bull run? After all, the crash of the crypto exchange FTX was only about two months ago and the aftermath is still noticeable, as other exchanges have recently struggled or even become insolvent. Many buyers have withdrawn their funds from crypto exchanges as they lost confidence in the centralized exchanges after the withdrawal from FTX stopped. This loss of confidence certainly cannot be restored within 2 months.

However, the events at FTX & Co should not be associated with Bitcoin. In principle, the decentralized managed blockchain has nothing in common with the crypto exchanges, even if you can buy Bitcoin there. If investors distinguish here and continue to recognize the advantages of the digital currency, such as the decentralization and the limited amount of BTC, this could further boost the market and the course of Bitcoin.

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Key resistance for bitcoin at $21,470

But what does the Bitcoin chart say? Technical analysis shows that although BTC/USD has broken key resistance around $18,500, the next critical resistance zone has not yet been reached as support. This mark is in the $21,470 price range, which Bitcoin needs to break to continue the uptrend. However, Bitcoin seems to be struggling here. Because the daily candle is currently showing a long wick, which is not a good sign for the bulls. Although Bitcoin was able to test the level, it is threatening to slip below $20,500 again at the time of publication.

Furthermore, technical analysis shows that key chart indicators for Bitcoin are not yet signaling a confirmed bullish trend reversal. So there was no so-called Golden Cross (Golden Cross), where the moving average price lines of the past 200 and 50 days cross bullishly. This can be seen in the chart showing the green and red lines. It is only a golden cross when the green line crosses the red from top to bottom, as last seen in September 2021, just before Bitcoin was able to start another rally to the all-time high of $69,000. This indicator was also seen in May 2020, followed by the Bitcoin bull market 2020/2021. That is why the Golden Cross is meaningful.

Other chart indicators do not confirm a bull market yet

The important EMA ribbons also show that caution is still needed. Although Bitcoin has managed to break through these average lines moving to the upside, there has not yet been an iteration that declares them as new support for the price. On the other hand, in the 2020/2021 bull market, the EMA Ribbons were regularly the main support from which Bitcoin continued its uptrend. Investors should be watching this bullish declaration closely. However, the course could correct again significantly, because the EMA ribbons are currently between 17,500 and 17,800 dollars.

The bullish “flip” of the ribbons, where the yellow lines slide over the red lines, has now occurred, which is a good sign, but there could also be a reversal in the short term. Exactly this situation was seen in early November before the FTX crash.

Despite Bitcoin’s strong momentum, investors should not become careless – especially when trading with high leverage on crypto exchanges. The risk of liquidation is high, especially given the current volatility.

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