Historically accurate ‘momentum indicator’ hints at possible future Bitcoin breakout

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Bitcoin (BTC) could experience a “massive bullish move” if a classic 2021 bull run trigger is repeated this week.

In a December 16 tweet, chain analyst Matthew Hyland, known by Twitter alias Parabolic Matt, called attention to the Bitcoin momentum indicator.

The momentum indicator hints at a potential “massive bullish move”

Although still below $ 50,000, Bitcoin has already exited a long-term downtrend on the Dynamics Indicator, which measures closing prices relative to a prior period.

Two of those breakouts have occurred this year, and after each, BTC / USD has seen a huge rise.

“The previous two times it has come out of a multi-month downtrend this year, a massive bullish move has followed,” Hyland wrote in the comments.

Annotated chart of the BTC / USD indicator versus the momentum indicator. Source: Matthew Hyland / Twitter

While not a guarantee of ‘up-only’ price action, momentum data joins a slew of chain metrics signaling bullish signals this month – a list that keeps getting longer.

Hyland is known for his very bullish price predictions, and last month caused a stir when it predicted Bitcoin would hit $ 250,000 in January 2022 while invalidating one of the popular stock-flow price models.

The lower #Bitcoin structure on the RSI and Momentum (Daily Timeframe) indicators looks a lot like what happened in September before the reversal started

• Momentum has burst • RSI needs close above resistance to confirm breakout • Bitcoin price awaiting breakout pic.twitter.com/XDwiUsSj2U

– Matthew Hyland (@Parabolic_Matt) December 15, 2021

In further analysis, he noted that Bitcoin’s momentum indicator and Relative Strength Index (RSI) on daily timeframes mimic the behavior of September, when the market hit a local low before hitting lows. historic highs of $ 69,000.

The dollar plunges after the Fed

Spot price action was calmer on Thursday, with Bitcoin persisting around $ 49,000 despite a notable drop in the US dollar.

Related: Bitcoin Loses Stupid Money As Retail Buys Most BTC Since March 2020 Crash

The U.S. Dollar Currency Index (DXY), which measures the USD against a basket of trading partner currencies, reversed its prolonged uptrend last week, with a steep decline on Thursday, according to data from TradingView.

1-day DXY candle chart. Source: TradingView

Traditionally inversely correlated to BTC, the decline in DXY follows a rise in crypto and stocks thanks to the Federal Reserve.

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