Cryptocurrency prices have dipped from multi-month peaks reached last week, but market observers say the foundation is solid for digital tokens to tackle their next major resistance levels soon.
Bitcoin retreated 1% Tuesday to around $37,100 after topping $38,000 last week, while Ether declined 1.5% to about $2,020. The moves down came as investors took profits following a surge since early October that brought Bitcoin up over 30% and Ether up 50% at their heights.
Keypoints
- Bitcoin and crypto prices have pulled back slightly from recent highs but sentiment remains bullish
- Bitcoin rallied over 30% since early October on hopes of a spot BTC ETF approval and a more favorable macro backdrop
- Analysts say Bitcoin looks positioned to break out above $38k and test the $42k level if momentum continues
- One analyst gives a 75% chance Bitcoin ends 2023 between $40k and $45k based on technical indicators
- Separately, an analyst sees “resurgent promise” in Terra ecosystem coins like USTC and LUNC which have seen renewed interest
Yet crypto bulls aren’t sweating the latest slide. “Momentum is mounting, with investors seeing dips as a time for accumulation,” said Hashnote CEO Leo Mizuhara.
Mizuhara and others argue the ingredients remain for Bitcoin to challenge the $45,000 threshold later this year, if not sooner. The largest cryptocurrency scored its recent gains based largely on mounting excitement around the prospect for the first physically-backed Bitcoin exchange-traded fund (ETF) in the U.S.
Approval of a spot Bitcoin ETF would remove a long-running regulatory barrier for many larger institutional players looking get exposure to digital currencies. This influx of new investor dollars could give Bitcoin prices a healthy kick higher.
Upbeat technical indicators lend further credence to predictions for a continued crypto climb. Katie Stockton of Fairlead Strategies said Bitcoin appears positioned to break out beyond $38,000 on its way to test around $42,200 next. She added that decisively exceeding that level would “affirm a long-term bullish reversal.”
Beyond bluechip coins, one analyst spied fresh green shoots in Terra ecosystem tokens TerraUSD Classic (USTC) and Terra Classic (LUNC), both clobbered in this year’s crashes. He cited USTC’s more than 150% gain over the past week as reflective of renewed retail interest in coins deemed essentially left for dead.
While unpredictable, the analyst noted these assets can still offer strong returns if actively traded. He compared the developments around Terra to the recent recovery of FTX’s FTT token as signals investors may be ready to re-engage with tarnished names again.
Of course, halting rallies and sudden pullbacks remain endemic to the crypto industry, meaning no price levels are ever guaranteed. But market experts seem to agree that whether Bitcoin hits $42k or altcoins like USTC melt up further, the overall prognosis looks healthier than it has in some time.
