Bitcoin Spikes To $23K But Analyst Sees Drag From Tech Selloff

Major coins trad­ed in the green on Wednes­day, as the glob­al mar­ket cap rose 4.10% to $1.06 tril­lion, record­ed at 8:30 p.m. EST.

What Hap­pened: The largest cryp­tocur­ren­cy by mar­ket val­ue, Bit­coin BTC/USD, rebound­ed from a late Tues­day swoon to trade above $23,000. Ethereum ETH/USD was up over 5% at $1,623. Doge­coin DOGE/USD rose p 4.58% in the last 24 hours, trad­ing at $0.086.

U.S. equi­ties saw a chop­py trad­ing ses­sion on Wednes­day as the tech-heavy Nas­daq Com­pos­ite, S&P 500 and Dow Jones Indus­tri­al Aver­age fell slight­ly by a few per­cent­age points. Investors were seen weigh­ing the lat­est series of fourth-quar­ter reports, most notably from icon­ic firms such as Boe­ing and Microsoft. Mean­while, many oth­er stocks drift­ed side­ways as the day unfold­ed, leav­ing traders on the look­out for the next shift in sentiment.

See More: Best Cryp­to Day Trad­ing Strategies

Elec­tric car mak­er Tes­la TSLA revealed in its lat­est earn­ings report that it has not pur­chased nor sold any Bit­coin in the fourth quar­ter for the sec­ond con­sec­u­tive quar­ter. The val­ue of its dig­i­tal assets totaled $184 mil­lion at the end of the quar­ter, a decrease from the $218 mil­lion at the end of the third quar­ter, owing to the impair­ment charges caused by the decline in the price of the apex coin. At the end of the third quar­ter, Bit­coin was priced under $20,000, while it was approx­i­mate­ly $16,500 at end of the fourth quarter.

“Bit­coin is con­tin­u­ing to trade in a rough­ly $1,000 range between $22,300 and $23,300 and is down a lit­tle over 1% so far on the day. Under the cir­cum­stances, we’re see­ing decent resilience with sen­ti­ment else­where turn­ing more neg­a­tive. Con­sid­er­ing the gains that pre­ced­ed it as well, the longer it can hold onto them, the more con­fi­dent the cryp­to com­mu­ni­ty will feel in its sus­tain­abil­i­ty and be tempt­ed back in. Of course, that’s all head­line-depen­dent, which has been less of a head­wind recent­ly,” said Edward Moya, a senior mar­ket ana­lyst at OANDA, in a note seen by Benzinga.

Moya added, “Bit­coin is low­er as a broad­er sell­off on Wall Street has a lot of traders enter­ing into de-risk­ing mode. The Jan­u­ary stock mar­ket ral­ly might be over and that could drag cryp­to low­er here. Bit­coin could be vul­ner­a­ble to a dip towards the $20,000 lev­el if the tech-dri­ven sell­off on Wall Street inten­si­fies over the next cou­ple of days.” 

Cryp­to ana­lyst Michaël van de Poppe said he would be inter­est­ed in buy­ing Bit­coin at two lev­els: $23,093 which he calls “cru­cial resis­tance to break’ and $21,410.

Kaleo, a pseu­do­ny­mous ana­lyst, said he has nev­er been so bull­ish on Bit­coin in his life. The ana­lyst believes the cur­rent ral­ly is about to accel­er­ate rapid­ly and the price will reach the $40,000 — $45,000 range with­in sev­er­al weeks. How­ev­er, Kaleo is not expect­ing a new all-time high (ATH). Instead, he pre­dicts con­sol­i­da­tion in the same range for a few months before the price retraces back to the mid-to high-$20,000 lat­er this year. “Just real­ly do believe we’re [due] for a mas­sive god can­dle some­time in the near future,” the ana­lyst added.

Read Next: UK Finan­cial Ser­vices Head Plans ‘Time­ly, Sen­si­ble And Bal­anced’ Cryp­to Regulation