Bitcoin Back Above $48,000 Is This Level The Springboard To $52,000?
Bitcoin roared back this week, clawing its way to $48,207 its highest point since early January. This fiery ascent follows weeks of muted trading, fueled by concerns about institutional outflows and a post-ETF price dip. But whats sparking this sudden surge? And can the digital dragon overcome its next hurdle?
Positive Winds Fill Bitcoins Sails
Several factors are propelling Bitcoins recent rally:
- Spot ETF Momentum: The long-awaited launch of spot Bitcoin ETFs in January might be finally delivering on its promise. Potential inflows and positive sentiment surrounding these new investment vehicles are driving interest.
- Halving Horizon: The Bitcoin halving, scheduled for May 2024, looms large. Historically, this event, which reduces the rate of new Bitcoin creation, has been linked to price increases, fueling investor optimism.
- Market Synergy: The S&P 500s recent ascent to record highs seems to be spilling over to the crypto market, creating a wave of positive momentum.
- Lunar Luck? Bitcoin often experiences gains around the Chinese New Year, and this year is no exception. The Year of the Dragon, with its auspicious connotations, adds another layer of bullish sentiment.
- ETF Absorption of Selling Pressure: Several ETFs have absorbed over a billion dollars worth of Bitcoin selling pressure in recent weeks, indicating underlying demand despite pre-ETF concerns.
But Can Bitcoin Slay The Resistance Dragon?
While the outlook seems bright, challenges remain:
- Resistance at $48,500: Bitcoin faces a crucial resistance level at $48,500. Breaking through this barrier is key for a potential new all-time high.
- Post-ETF Sell-off: Despite the recent surge, Bitcoin remains below its pre-ETF highs, sparking concerns about a potential sell-off after the initial excitement fades.
- Volatility Reigns: Crypto remains a notoriously volatile asset, and predicting future price movements is fraught with difficulty.
Sylvia Jablonski, CEO of Defiance ETFs, attributes the price appreciation to recent inflows into the spot ETFs, the prospect of the halving, and general market momentum. However, she cautions that breaking through resistance levels is never guaranteed, and investors should approach any investment with caution.
Meanwhile, Markus Thielen, the founder of 10x Research and head of research at Matrixport, predicted more rise in bitcoin prices using Elliott Wave theory, a technical study that makes the assumption that prices move in repeating wave patterns.
The idea states that price trends evolve in five stages, with waves 1, 3, and 5 serving as impulse waves that indicate the primary trend. Retracements between the impulsive price movement occur in waves two and four.
According to Thielen, BTC has begun its final, fifth impulsive stage of its uptrend, aiming to reach $52,000 by mid-March, after completing its wave 4 retracement and correcting to $38,500.
Featured image from Adobe Stock, chart from TradingView
Read more: https://www.newsbtc.com/news/bitcoin-back-above-48000-is-this-level-the-springboard-to-52000/
Text source: NewsBTC
