- BTC experienced a price correction after briefly touching the $23,000 price level.
- Others are still convinced that this is only one big bull trap.
- On the other hand, multiple factors are supporting the case for a $40,000 BTC price in Feb.
The crypto market appears to have met solid resistance after an unanticipated pump this January. Bitcoin (BTC), the leader of the pump, has retraced from $23,000 to a current price of $22,694.43, as per CoinMarketCap.
This $23,000 price rejection occurred after many traders decided to take profit from their gains. However, others are still convinced that the current market movement is one big bull trap waiting to manifest soon.
On the other hand, a number of factors are lining up to present a case for a $40,000 bitcoin price in February. Among these is PlanB, the very person who introduced the Stock-to-Flow model.
As stated in the tweet, PlanB drew his reference from BTC’s price movement from December 2020 to January 2021.
PlanB might not be alone in believing in this possibility. Aside from BTC’s price movement, technical analysis-wise, there are a couple of other factors akin to the start of the 2020 bull run.
For instance, there is a resurgence of Covid-19 deaths in China, the epicenter of the pandemic. As Bloomberg reported, Covid-19 deaths from Chinese hospitals amount to only a tenth of the total toll. It can be noted that BTC and the rest of the crypto market gained popularity as a hedge amid increasing market fear.
Another factor to consider is the US Federal Reserve’s interest rate. Specifically, the Fed is expected to slow down the increase of its interest rates further after many months of acceleration back in 2022. This is similar to what happened back in mid-2019, in which BTC alone ramped up in price by more than 200%.
But before investors drain their wallets to buy crypto, it is wise to assume that the market is still bearish. Frankly, there is still more possibility of BTC hitting sub-$20,000 than actually reaching $40,000, let alone $30,000.
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