Bitcoin Gearing Up for Bullish Breakout
The world’s most well-known crypto asset – Bitcoin – has gained more than 58% since the year’s low of $27,734 that was reached on January 4. For the last 10 days, the flagship cryptocurrency has been stuck in a range between $40,000 and $45,000, bouncing perfectly between the two S/R levels but a breakout seems imminent.
In a recent hearing before the House Committee on Financial Services, Fed Chair Jerome Powell said that the Fed is not planning to ban cryptocurrencies, however, in his opinion, these assets should be regulated. In his words: “There is no intention to ban them, but, you know, stablecoins are like money-market funds, they are like bank deposits, but they are, to some extent, outside of the regulatory perimeter. It’s appropriate that they be regulated.”
Just recently, the People’s Bank of China banned all crypto-related business activities and transactions, which caused a brief dip in the crypto market. The United States’ choice to regulate rather than outlaw cryptocurrency is definitely friendlier and besides, the Fed is currently weighing the costs and benefits of creating a CBDC (central bank digital currency). A report regarding such a CBDC is expected to be published in the near future.
Some of the other cryptocurrencies in the Top 10 are in the red for the last 7 days, albeit by a small percentage, but all of them are in the green for the last 24 hours. Cardano’s ADA is changing hands at $2.16, with a 3.68% increase over the last 24 hours; Binance’s BNB is trading right on the $400 level, with almost 7% gains for the last day; Solana is up 4.40%, currently trading at $143. Ripple’s XRP is approaching the key resistance at $1.00, currently trading at $0.97, up 3.80% for the last 24 hours.
Chart Analysis – BTC/USD
Bitcoin is up 3.87%, currently trading at $44,804 and approaching the key resistance at $45,000. BTC last tested this level on September 23, and the rejection turned into a drop to the support at $40,000. Now the resistance level is under siege once more and this second attempt may result in a true break.
The price is already above the bearish trend line seen on the chart below, the Relative Strength Index has started to move up and the MACD is looking like it’s about to do a bullish cross. The break of the trend line will be clearer when the Daily candle closes and the same is true for the resistance at $45K but the stronger bullish signal will be the break of the 50 days Moving Average.
If BTC can break the confluence zone created by the trend line, $45K resistance, and the 50 MA, this would show strong bullish pressure, and the chances that the pair will continue on an upward trajectory for an extended period will increase.