Key takeaways:
- Bitcoin broke $46,000 resistance on Sunday for the first time since the beginning of 2022
- A prominent crypto analyst thinks Bitcoin could be decoupling from equities and benefiting from capital flowing out of the S&P 500
- Bitcoin’s next major resistance lies at roughly $52,000
Bitcoin is back at its yearly open, where it will go from here?
After weeks of sustained positive price movement, Bitcoin yesterday broke the $46,000 resistance for the first time since January and jumped to $47,500 in the span of hours. The world’s oldest crypto is now up more than 14% in the last seven days and roughly 42% since its 2022 low.
According to crypto technical analyst Matthew Hyland, Bitcoin’s next major resistance lies at approximately $52,000. Given the momentum Bitcoin has built over the last three weeks, it seems entirely plausible the world’s largest market cap crypto could break the $50,000 psychological limit and challenge the next major resistance level very soon.
According to a trader and fund manager with 25 years of experience in the markets, who goes by the moniker of Macro Charts on Twitter, the recent crypto rally coincides with one of the “biggest weekly purges” in S&P 500 positions in history. This could indicate that the rising prices of crypto assets are fuelled by capital flowing from equities. The prominent analyst added that “Similar setups led to some Major rallies” in the past.
Another reason for a bullish short-term outlook is the rising BTC exchange outflows, which is usually considered a bullish indicator. Last week, blockchain research firm Glassnode noted in its report that the narrowing of the trading range coupled with growing exchange outflows points to a potential breakout towards this year’s top. Now, roughly a week later, the hypothesis has been realized and Bitcoin is currently changing hands very close to its year-to-date (YTD) high.
It will be interesting to observe whether the rally will continue into April and beyond. For the time being, it is very encouraging to see Bitcoin’s appreciating in value despite rising interest rates and geopolitical tensions. For years, most crypto critics were adamant that Bitcoin’s success hinges upon access to easy money supplied by quantitative easing measures. If this year’s market performance is any indication, that is clearly not the case.
