The big Bitcoin rally in January has given on-chain analysts new hope that the bears are on the run and we have entered a new bull market cycle.
On Feb. 3, Bitcoin trader and Capriole Fund founder Charles Edwards explained why he thought a new bull market had begun.
“We’re likely at the start of a new cyclical Bitcoin bull market, inside the volatility circle,” he said.
The chart used to back up the notion looks into addresses that are in profit. Furthermore, the metric has jumped from 50% to 70% marking a new turning point, according to the chart.
Previous turning points for BTC addresses in profit have coincided with a transition from bear to bull markets. Additionally, they’re also followed by periods of high volatility.
Bitcoin Bulls Back Yet?
Edwards said that we have just witnessed a “significant momentum shift to the upside that looks symbolic of a market regime change.” He added:
“The 40% rally in January gives good odds that we have transitioned from a bear market into the early stages of a new bull market which will peak post 2024 halving.”
Furthermore, market sentiment has definitely shifted, as evidenced by the fear and greed index, which is still in greed territory.
Fellow trader and analyst Scott Melker (aka Wolf of All Streets) said $25,212 was a key level for BTC. “A break above would be the first higher high since $69,000 and would technically invalidate the bear thesis,” he noted.
However, prices don’t move in a straight line, and technical indicators such as RSI suggest that Bitcoin is currently overbought. This could lead to a larger pullback over the next couple of weeks before the uptrend continues. There have also been concerns about market manipulation with this year’s rally.
Hitting Resistance at $24,000
Bitcoin had dropped 1.8% on the day at the time of writing. As a result, the king of crypto was changing hands for $23,482 following a brief spike above $24,000 during the early hours of Feb. 3.
Furthermore, the asset is up 11.4% over the past two weeks and 41% over the past month. It has notched up its best January since 2013.
The $24,000 price level is proving to be solid resistance, with three failed attempts to breach it this week. A retreat to support near $21,000 could be imminent if the buying pressure is exhausted over the weekend.
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