• Bitcoin’s daily close under $22,692 could end up its bullish momentum for the asset since the beginning of 2023.
• Bitcoin has come under strong selling pressure following SEC’s crackdown on Kraken and shutting down of its crypto staking services.

The world’s largest cryptocurrency Bitcoin (BTC) has delivered a strong show since the beginning of 2023 gaining nearly 40% so far. However, on Thursday, February 9, BTC came under strong selling pressure following SEC’s regulatory action on the crypto exchange Kraken.

Amid the broader market correction, the BTC price has also tanked by 4% and is currently trading at $21,818 with a market cap of $420 billion. However, for Bitcoin to keep this year’s bullish trend intact, it must give a daily close above $22,692, stated popular crypto trader Rekt Capital.

If it fails to close above these levels, Bitcoin (BTC) would lose steam and could once again go below $20,000. Below is the chart showing how the BTC price has formed a downside wick below the support line.

In his further messages, Rekt Capital noted:

BTC is threatening to lose its multi-week Higher Low (green) after rejecting from ~$23,400 resistance. At this stage, BTC could still recover back into the green triangle and have this price action print as a downside wick. This Higher Low is the one to watch.

Besides, he also outlined some insights into crypto trading psychology. He added. 

After a successful trade, dopamine is released in the brain, leading to the desire to repeat this experience. Try to go against this urge. Let the euphoria of the win die down. And allow enough time for your neurological chemistry to return to baseline.

Bitcoin On-chain Analytics

While the FTX collapse sent shockwaves across the entire crypto industry, it proved to be better in terms of BTC self-custody. Citing data from Santiment, popular crypto analyst Ali Martinez reported:

FTX collapse was bad for the industry but great for Bitcoin! Since Nov. 2022, data from @santimentfeed shows that 260,000 BTC were withdrawn from crypto exchanges and more than 350,000 $BTC have been kept out of exchanges. Not your keys, not your coins. It’s that simple!

However, some research also shows that Bitcoin price hasn’t reacted to macro developments during Q4 2022. Instead, the swing in the price was more related to the collapse of the crypto exchange FTX. In a recent research paper by the Federal Reserve Bank of New York – research analysts Gianluca Benigo and Carlo Rosa – noted:

The key result is that, unlike other U.S. asset classes, Bitcoin is orthogonal to monetary and macroeconomic news. This disconnect is puzzling as unexpected changes in discount rates should, in principle, affect the price of Bitcoin even when interpreting Bitcoin as a purely speculative asset.

The study took into account different macroeconomic news categories, the real economy, inflation, monetary policy news, and other forward-looking indicators. It will be interesting to see how BTC performs into the rest of the year.