The Bitcoin (CRYTPO: BTC) price currently stands at US$43,845 (AU$59,224).
That's almost right where it was this time yesterday, but down 3% from levels of US$45,268 on Tuesday, according to data from CoinMarketCap.
Now a 3% fall in the Bitcoin price in 2 days is almost negligible in the highly volatile world of cryptocurrencies.
Indeed, the world's first crypto remains up 19% over the past 7 days. Though it's still down 36% from its 10 November record highs.
But after hitting its best winning streak in 4 months, crypto investors are wondering whether the next trend following the current breather will be up or down.
Where to for the Bitcoin price?
Commenting on the recent pullback in the Bitcoin price, Matt Maley, chief market strategist at Miller Tabak + Co said (quoted by Bloomberg), "[The] pullback is due to some profit-taking after a big move. Bitcoin had rallied about 38% on an intraday basis in less than two weeks, so I think it's just a matter of traders taking some short-term profits."
Noting that the crypto remains above its trend-line from the 10 November high, Maley added it had "plenty of room to take a breather over the near-term without disrupting its recent advance".
Meanwhile, analysts at crypto exchange Kraken are keeping a close eye on the pace of the US Federal Reserve's monetary tightening and the severity of the global pandemic:
With a hawkish shift from the Fed, continued omicron fears, lower stock valuations, and inflation fears at a multi-decade high, crypto remains vulnerable to de-risking should equity markets correct in the coming month(s).
A technical analysis approach
Katie Stockton, founder of Fairlead Strategies, is taking a technical analysis approach in gauging the Bitcoin price.
As Bloomberg reports, Stockton "is tracking something called the monthly MACD momentum gauge for Bitcoin".
What's that?
Well, it stands for moving average convergence divergence. Equity analysts use it as a trend-following momentum indicator.
Stockton says the MACD momentum gauge was flashing "buy" since July 2020 before crossing into "sell" at the end of January, when the Bitcoin price fell below US$40,000.
According to Stockton, "It tells us that this year could see more volatility, and it means we need to be more short-term oriented when committing to long positions."
