Bitcoin has started a new bull market. The next key price level to watch.

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Bitcoin has gained over 30% in a matter of weeks amid a broader rally in risk assets. The time of dreams

Bitcoin and other cryptocurrencies paused on Monday after digital assets surged to the highest levels since August over the weekend. With crypto prices having returned to where they were before the disastrous FTX crash, some traders are calling it a new bull market.

The price of Bitcoin has fallen less than 1% in the past 24 hours to $22,750, after the biggest digital asset rose above $23,000 over the weekend for the first time in five months. With prices up more than 30% in less than two weeks, Bitcoin pulled out of its trough around two-year lows after the FTX exchange collapsed in November, which caused the latest shock to crypto markets. .

Bitcoin’s rise went hand in hand though it outpaced a similar rise in the stock market, where the Dow Jones Industrial Average and S&P 500 gained as investors grew more bullish on risk-sensitive assets. A macro backdrop of high inflation and rising interest rates has strengthened the bond between cryptos and equities over the past year, and recent signs of slowing inflation and policy easing monetary policy by the Federal Reserve supported both asset classes.

Bitcoin has a strong positive correlation with risk factors, and it has risen as stock markets have seen more gains, said Naeem Aslam, an analyst at brokerage AvaTrade. The big question is whether it continues to trade higher as cracks have started to appear in the risk rally. Traders may give up supporting riskier assets this week. Comments from Fed officials indicated that the Fed seems in no rush to end its ultra-hawkish monetary policy.

Nevertheless, after Bitcoin’s remarkable rally, some traders are clamoring for more gains. The failure of FTX and the subsequent bankruptcy proceedings looked like an existential crisis for cryptos, but much of that pessimism seems to have faded. Prices above pre-FTX levels have fueled a wave of optimism amid bets that the worst of the brutal bear market that has gripped space for a year may be over.

Bitcoin has started a new bull market and is heading towards $24,800, where the psychologically important 200-week moving average and the 161.8% Fibonacci level of momentum from the December lows are concentrated, Alex Kuptsikevich said, analyst at broker FxPro, referring to technical market analysis levels that would indicate the strength of cryptos.

From a technical standpoint, Bitcoin trend indicators usually signal a strong uptrend, and it looks like the price is aiming for its August high at $25,200, exchange analyst Yuya Hasegawa said. crypto Bitbank, echoing Kuptsikevich’s outlook for Bitcoin from a technical perspective. perspective.

However, Bitcoin’s Relative Strength Index (RSI) is deviating from the upward price movement and starting to decline, which is not a good sign for the current price trend, Hasegawa added. Bitcoin could test its August high and be supported at the $20,000-$21,000 level, but with its RSI divergence and some big tech gains coming this week, it could get quite choppy.

Many traders are specifically watching Bitcoin at $30,000, which would represent a price level not seen since the onset of the crypto credit crunch last June, when several lenders headed for bankruptcy amid market turmoil. . While prices may head towards near $25,000 in the near term, according to Kuptsikevich and Hasegawa, the key $30,000 level may take a bit longer to reach.

The market might need a long recharge and consolidation before a new bullish wave begins, Kuptsikevich said.

Beyond Bitcoin, Ether the second largest crypto rose less than 1% to $1,630. Smaller cryptos or altcoins were more mixed, with Cardano 1% lower and Polygon 1% higher. Memecoins were also mixed, with Dogecoin gaining 4% and Shiba Inu just below flat.

Write to Jack Denton at [email protected]

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