Bitcoin (BTC) kicks off in the last week of March after returning to its yearly opening price above $46,000.
In a surprisingly strong bull run over the weekend, BTC/USD began to rise on Saturday, continuing to challenge the rally since early 2022 all night long.
In the face of a great climate with a lot of uncertainty, bitcoin’s strength is naturally taken with a pinch of salt this month. The reaction is understandable, given that previous attempts to get out of the multi-month trading zone ended in failure.
Despite periods of volatility, bulls have always been disappointed and bitcoin has not only reversed, but often near the lower end of the range, costing both shorts and longs dearly.
However, there is hope that things will indeed be different this time – analysts have long argued that a volcanic eruption alone above the access threshold triggered by a yearly opening of approximately $46,200 would be enough to trigger a paradigm shift.
Now that this has been deployed, the focus is on the final hurdle – the consolidation of multi-month resistance levels as support.
As the process continues on Monday, Cointelegraph looked at the potential triggers that could cause or break this important bitcoin price cycle.
Bitcoin erases the fall in 2022
“Gradually, so suddenly” or just a coincidence? Traders are still trying to understand the new strength of Bitcoin this week.
Since the new year, it has not been on the chart – BTC/USD returned to the $47,000 mark. After jumping nearly $3,000 in 24 hours, the biggest cryptocurrency has hit hard against resistance levels that have held bulls in place for months.
The value of $46,000 has always been a hot topic – many have said that a return to the annual open would signal that Bitcoin is ready for big things again.
However, few believed that this phenomenon would happen “out of hours”, and doubts about the true strength of the gathering naturally spread on social networks at the beginning of the week, as well as at the beginning of the gathering itself.
However, more cautious voices do not rule out the possibility of a further rally, even if the long-term outlook remains low.
Analyst and statistician Willy Wu reports that “underlying buying pressure on Bitcoin has now grown into bull market territory.”
Meanwhile, co-analyst Matthew Hyland, the main proponent of the $46,000 argument, has identified the $52,000 target as the next long-term wall of resistance that can be broken down.
In a tweet, he added that the move was prompted by a rise in the Bitcoin Relative Strength Index (RSI), which itself is a classic signal of impulsive trends.
The Relative Strength Index (RSI) gauges how overbought or oversold an asset is at a given price, and when it comes to bitcoin, the result is up from its low since mid-January, data from Cointelegraph Markets Pro and TradingView shows.
Thus, the further development of RSI may dictate the range of growth in accordance with historical behavioral norms.
BTC/USD daily chart (bit mark) with RSI data. Source: Trading View
Analysts See Bitcoin Stocks Drop
The world is confusing, and when it comes to how Bitcoin should behave, the picture doesn’t get any simpler.
Inflation, war in Europe, and the lingering threat of a coronavirus resurgence — to name but a few key factors — have prompted commentators to foresee doom and gloom for equities and risky assets in 2022.
Just this month, several sources warned that Bitcoin could soon collide with Waterloo as a major capitulation of stocks begins in March 2020.
Some argued that the easy money era that followed was over, and that only continued quantitative easing would restore the massive capital inflow that Bitcoin enjoyed later that year.
Now, however, Bitcoin appears to be exploding on its own, challenging the intense stock market relationship that, in the case of the S&P 500, hit a 17-month high last week.
While Standard & Poor’s ignored the impact of the Russo-Ukrainian war and the US Federal Reserve’s austerity plans, analyzes show selling has been big and short selling is everywhere — ironically the perfect fuel for the new “short squeeze.” “up.
“The risk/no-risk correlation for stocks is a short-term effect. BTC is trading this correlation due to short-term speculators,” Wu explained in a recent dedicated Twitter thread on the topic.
“Bitcoin’s domestic demand base is driven by a stronger adoption curve. Eventually, the market splits; the last time was in October 2020.”
If speculators are still running the stock this year, the return of interest in bitcoin futures could be the catalyst for looking to the future.