Bitcoin crossed the $ 40,000 level today for the first time since early January. Then the cryptocurrency reached a new all-time high and went into consolidation for a month.
As analyst Michael van de Popp notes , this respite has allowed many altcoins to refresh their own highs, but now that the DeFi segment is starting to overheat, attention may again be shifted to the first cryptocurrency.
The 4-hour chart shows a breakout of the $ 35,000 resistance followed by a healthy continuation of the rally to current levels. The $ 38,000 level was a small obstacle, but was successfully taken. It was already tested this week – during the Elon Musk rally – and then pushed the course back. The $ 40,000 zone is the last major hurdle before new all-time highs, writes Van de Popp.
On the daily chart, the primary target is at $ 40,500, and the next one is at $ 50,000. This level coincides with the 1.618 Fibonacci extension, which makes sense to use when making forecasts in a new market territory.
However, Bitcoin has already rallied significantly in recent months, so it is desirable that resistance at the current historic high turn into support to confirm the uptrend will continue. Otherwise, as history shows, he risks remaining in the same channel.
Altcoins have shown significant growth in recent days. Ether hit all-time highs around $ 1,750 and Binance Coin soared to $ 75. Now attention is focused on the launch of Ethereum futures on the Chicago Mercantile Exchange (CME) – it will take place on Monday. JPMorgan believes that ether may repeat the fate of bitcoin in 2017 and go down. Others admit that the listing will help it gain institutional investor support and grow. It should be noted that at the start the trading volumes are likely to be small.
Van de Popp notes that historically, Bitcoin’s dominance of the market peaked in December, followed by altcoins, led by Ethereum, to rise in January. It happened this time too. In February, the decline in Bitcoin’s dominance usually reached a local minimum, and then its market share increased again.
Analytical company Santiment draws attentionthat the “whales” whose wallets contain more than 1,000 BTC, against the background of the current rise, do not stop increasing the volume of cryptocurrency, and middle-level traders (from 10 to 1,000 BTC) are fixing profits. At the same time, smaller addresses show signs of lost profits syndrome or FOMO and quickly return to the market. The accumulation of bitcoins on whale-level addresses, along with continued outflows from Coinbase, usually indicates the presence of large investors.
Trader Scott Melker says bitcoin is currently making a major bullish breakout, which could technically lead it to $ 63,000. “Basically the best day of all time,” he adds. “Note that the candle should close above the resistance.”
EToro US Managing Director Guy Hirsch mentionsthe occurred rotation of capital from bitcoin to DeFi and other altcoins. At the last stage, the market went into a mode of full openness to risks, DeFi tokens were adding 30-100% per day, and the movement of bitcoin stopped. Based on data from options trading, he names $ 52,000 and $ 56,000 as his next targets.
“I would be surprised if bitcoin doesn’t surpass $ 40,000 in the coming months. There are no real supports at these levels because he traded there for a very short time, Hirsch said. “The long-term outlook remains bullish, as evidenced by observations from PayPal, which was surprised by the number of cryptocurrency transactions on its platform.”
Denis Vinokurov, head of research at the crypto-brokerage company Bequant, believes that the behavior of bitcoin above $ 40,000 is difficult to predict: “There is little information, and the previous maximum is a natural goal. What will happen after that is anyone’s guess. “
The head of the trading department of the crypto investment platform CrossTower, Chad Steinglass, expects that after the breakthrough of $ 40,000, Bitcoin will face another explosive rise, similar to what happened in December 2020, when the market slowed down to about $ 30,000, but, having overcome this level, quickly rose to $ 42,000: “ If new investment demand can push through this wall of sellers’ interest, I expect risk-reducing traders to disappear and yet another growth cycle. ”
Crypto strategist Joel Krueger admits that the consolidation is not over yet. “We think that the market should not yet expect a significant bullish continuation above $ 40,000. Weekly and monthly indicators indicate serious overbought,” he explained.