Bitcoin rose as high as $47,583 on Monday, well above the $35,000-$45,000 band it has been stuck in since January.
Bitcoin broke out of a tight trading range and erased this year’s losses amid a broad rally in cryptocurrencies, sparking speculation that the biggest digital asset could soon break the $50,000 mark.
The token rose as high as $47,583 on Monday, well above the $35,000 to $45,000 band where it has been stuck since early January. With the new gains, Bitcoin is now up 1.9% for the year, compared to a 4.7% drop for the S&P 500. Ether similarly bounced up 3.7% to $3,358 on Monday. , while altcoins such as Solana’s SOL, Avalanche’s AAVE and Dogecoin rose between 5.5% and 9.4%.
Bitcoin may find its next resistance level at $52,000, and if it breaks above it, it could advance to $65,000, not far from the all-time high it hit in November, according to Fadi Aboualfa, head of research at Copper. Rick Bensignor, president of Bensignor Investment Strategies, said in a note on Sunday that Bitcoin is “on the brink of a 20% surge.”
The currency has been stuck on a narrow path as the Federal Reserve and other central banks removed some of the stimulus measures they put in place in response to the pandemic downturn. That means there is less cash to invest in riskier assets, including cryptocurrencies. Additionally, digital currencies came under scrutiny with speculation that they could be used to circumvent Russian sanctions, although many analysts reject that claim.
Still, Bitcoin and other tokens like Ether began a steady advance this month alongside broader gains in US stocks. But it took until the last day for Bitcoin to convincingly take off $45,000, a level it had only touched briefly. since the beginning of January.
“As we test the top of the 2022 trading range for the fifth time, this is another one of those Bitcoin moments where the narrative could quickly change and investors pile in, driving Bitcoin price higher,” said Antoni Trenchev. , co-founder and managing partner of Nexo. “It could be time to wake up from the Bitcoin sideways slumber that 2022 has been.”
The renewed optimism for crypto followed comments from US Treasury Secretary Janet Yellen, who said in a March 25 interview with CNBC that despite her own skepticism about the asset class, “There are benefits to cryptocurrencies and we recognize that payment system innovation can be a healthy thing.” Speculation on social media also suggested that the trade was backed by the activity of whales from the Luna Foundation Guard, a blockchain-focused open source Terra, which said it plans to back the network’s token with more than $10 billion in Bitcoin reserves.
Bitcoin was well above its 50-day moving average in recent days, which is currently hovering around $41,085. That puts it around the 80th to 90th percentile and in the “overbought” range, according to Bespoke Investment Group. But while that indicates the possibility of a drop in the price of many assets, with Bitcoin it has historically been the opposite, the firm said.
“When it has been similarly overbought in the past (over the last five years), it has averaged significant gains between one and 12 months,” according to the Bespoke report.
When Bitcoin has been in the ninth decile of its spread against its 50-day average, it has historically risen 16% in the next month, is up 100% six months later, and is up 274% after a year, according to data compiled by Made to Order.
“Normally this is not what you see for typical stocks or ETFs, but because Bitcoin has mostly traded higher over the years and really has a lot of momentum behind it, overbought levels are not yet They’ve become a hindrance to this particular space.” Bespoke wrote.
Bitcon’s gains since mid-March, even as Russia’s war in Ukraine dragged on, also boosted it against gold, its traditional safe-haven rival, which traded sideways during the period.
(Updates with price data and context in the second and seventh paragraphs).