- Having wiped away all of this year’s losses, Bitcoin is now starting afresh, amidst a broad rally for cryptocurrencies and generating hopes that it could soon surpass the US$50,000 level.
- Bitcoin is also in the overbought zone, and technical analysts have noted that each time Bitcoin has entered that region, has normally led to stronger rallies in the subsequent 6-month period.
Now that Bitcoin has convincingly blast through the strong resistance at US$45,300, many investors are asking what’s next for the benchmark cryptocurrency, with bulls looking immediately at the US$52,000 level.
Having wiped away all of this year’s losses, Bitcoin is now starting afresh, amidst a broad rally for cryptocurrencies and generating hopes that it could soon surpass the US$50,000 level.
Some analysts suggest that Bitcoin’s next level of resistance isn’t US$50,000 but in fact US$52,000 and should it be able to scale that hurdle, make it all the way to US$65,000, not far from the all-time-high it reached last November.
Bitcoin is also in the overbought zone, and technical analysts have noted that each time Bitcoin has entered that region, has normally led to stronger rallies in the subsequent 6-month period.
While Bitcoin has generally traded a tight range as the U.S. Federal Reserve and other central banks started to withdraw monetary stimulus from frothy markets, the steady advance over the past several weeks has some Bitcoin bulls hopeful that the best is yet to be.
Part of that optimism stems from comments from the U.S. Treasury Secretary Janet Yellen, who said in an interview with CNBC last week that despite her own skepticism about cryptocurrencies, “there are benefits from crypto and we recognize that innovation in the payment system can be a healthy thing.”
Although most other financial assets can be expected to experience sharp corrections if overbought, these technical markers have yet to become headwinds for the Bitcoin and part of the reason of course is that like a chimera, Bitcoin is malleable to various investment narratives.
If markets get hammered, Bitcoin can be talked up as a “haven” asset and if risk assets rally, some of that risk-on sentiment will spillover into the cryptocurrency space as well.
