Bitcoin breakout: Is positive momentum on the horizon for the world’s most popular cryptocurrency?
This week, the price of Bitcoin (BTC) surged to $45,000 for the first time in a month. This is after falling below $40,000 amid a torrent of negative political and financial market news. As of February 13, the cryptocurrency is trading at the $42,000 level. Can the Bitcoin price rise above $45,000 in the coming week? And if not, how long will it take for BTC to regain its positive momentum?
Bitcoin breakout: Room for growth
At the end of this week, Bitcoin was trending towards a $40,000 retest, however, the coin still has room for growth.
On February 10, the US released statistics on consumer price growth, from which it follows that inflation in the country remains at a high level.
We have seen many times before, the connection between the increase in dollar inflation and an increase in crypto market prices. High inflationary risks, together with the US Federal Reserve’s plans to end the asset buyback program soon, may encourage investors to look for ways to keep assets and prevent them from dropping in price.
As such, in the coming two weeks, BTC will be able to overcome the $46,000 mark and gain a foothold above it. On the other hand, there is the possibility of a price drop to the level of $40,000 if the stock market continues to seriously decline.
A wait-and-see position
Currently, the main resistance level for Bitcoin is the $45,000 mark. Despite a large number of orders placed in the $40,000 range, many “bears” have taken a wait-and-see position as the crypto market remains closely linked to stock indices and is very sensitive to geopolitical risks.
By the end of the week, the digital asset market can expect increased volatility, given the importance of the trading week results for Bitcoin.
A weekly candle close below $42,000 will form a bearish candlestick pattern. This means that buyers will have to go on the defensive for a couple of weeks to prevent sellers from breaking through to the $40,000 level.
The Crypto Fear & Greed Index is also unstable, surging from 44/100 to 54/100 in the middle of the week and back on the weekend.
Bitcoin Breakout: Not in February
Crypto analyst Benjamin Cowen predicted that in the most optimistic scenario, Bitcoin could return to growth no earlier than three weeks. Such a prediction is based on historical data. The fact is, it takes an average of three to six months for cryptocurrency to regain its value after dropping below the support level of the bull market. After that, the asset usually returns to growth.
The bull market support level is formed from the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA). At the moment, the bull market support level is in the range of $45,000-50,000.
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