Bitcoin, the world's largest cryptocurrency by market capitalization, saw a 0.61% price increase over the past 24 hours to $29,389.24. This comes after a period of sideways trading for Bitcoin, which has struggled to break out of the $20,000 - $30,000 range over the past couple of months.

The 0.61% daily gain brings Bitcoin's 7-day losses to -3.04%, as the cryptocurrency continues to consolidate after reaching 2022 lows around $17,500 last month. However, zooming out shows Bitcoin remains firmly in a macro uptrend, with 6-month gains of +27.33% highlighting the cryptocurrency's resurgence since the start of 2023.

In this technical analysis, we will analyze Bitcoin's latest price action, trading volume, market dynamics, and outlook. Key highlights include:

• Bitcoin showing signs of bottoming out around $20k level after capitulating last month
• Healthy consolidation above 200-day moving average, which sits around $22k
• Trading volume elevated but not yet indicative of a breakout
• Macroconditions improving for risk assets, but crypto sentiment still cautious
• Near-term resistance at $32k, with bulls targeting a move back to $40k

Is This the Start of a New Bitcoin Rally?

After plunging below $17,500 in June 2022, Bitcoin has shown remarkable resilience around the $20,000 handle. This key psychological level also aligns with Bitcoin's 200-day moving average, which usually acts as an important long-term trend indicator.

Bitcoin has rebounded 30% from its June lows, helped by oversold conditions and improving macro sentiment. However, trading volume has been muted relative to earlier stages of the rally, indicating caution among investors.

The Cryptocurrency Fear & Greed Index, which measures market sentiment, remains in "Fear" territory at 31. This suggests traders remain skeptical of a new bull market, likely waiting for a decisive break of $32k resistance before jumping in.

However, on-chain metrics continue to flash bullish signals. Bitcoin reserves on exchanges are declining rapidly, indicating coins are being moved into cold storage wallets for long-term holding. This highlights a steady reduction in sell-side pressure.

Overall, while Bitcoin appears to be bottoming out around $20k, bulls likely need a catalyst to propel prices above $32k and kickstart a new rally. This could come from continued improvement in inflation data, positive momentum in equities, or simply from growing stability in crypto markets. But for now, expect ranging action to persist.

Will We See a Return to Bitcoin's Bull Market Highs in 2023?

Bitcoin's all-time high sits around $69,000, reached in November 2021 amid the last bull cycle. With prices currently hovering 65% below this level, many investors wonder if/when we may see a return to these lofty highs.

There's no doubt Bitcoin remains firmly in a long-term uptrend, even despite the brutal -70% bear market drawdown through 2022. Much of this relates to Bitcoin's fixed supply schedule, which sees issuance halve every 4 years. Each halving has so far catalyzed a new bull run driven by increasing scarcity.

However, the question is whether Bitcoin can reclaim its former highs in this cycle, or if a return to the peak will take until the next halving in 2024.

There are arguments on both sides. Bulls will point to Bitcoin's unparalleled 200% CAGR, suggesting a recovery to $69k and beyond is inevitable based on past market cycles. Additionally, Bitcoin adoption continues growing rapidly, evidenced through accumulation by institutions, countries adopting Bitcoin as legal tender, and integrations by tech giants like Twitter. All of this provides a strong base.

On the flip side, bears would argue too much damage has been done to investor psychology and trust in crypto markets during 2022's implosion. Much work likely needs to be done by the industry to repair its reputation and prevent overleveraging before mainstream comfort with Bitcoin returns.

My take is that while a favorable macro backdrop could propel Bitcoin to $69k by end of 2023, it may take longer to repair the psyche. A safer target is $40k-$50k this cycle, with a chance of new highs by 2025. But in the long-term, Bitcoin's upside remains substantial.

Conclusion

Should I Buy Bitcoin Right Now?

Bitcoin looks to have established a bottom around $20,000 after its brutal capitulation last month. This key support aligns with the 200-day moving average, which is a positive sign for long-term trend. Short-term sentiment and volume indicate continued caution among investors, likely waiting for a break of $32k to signal a new rally.

Therefore, while now appears to be an opportune time to accumulate Bitcoin around $20k for the long-term, traders may want to wait for a technical breakout before going long. My view is to scale into Bitcoin on major pullbacks, cost averaging below $30k. But avoid excessive leverage, and be ready to hold for years to maximize upside.

How High Can Bitcoin Go This Cycle?

Bitcoin seeing a full recovery to its $69,000 all-time high later this year would require a perfect macro backdrop and very aggressive buying. A more likely scenario is continued range trading this summer, followed by a rally back to $40k-$50k if inflation keeps moderating and equities find support. While Bitcoin's long-term trajectory remains firmly upward, a return to peak levels may take until the next halving after 2024 due to psychological damage from 2022. Remain patient, take a long-term view, and avoid reacting emotionally to volatility.