What’s Next For Bitcoin Prices After Their Latest Gains?
Bitcoin prices have rallied lately, climbing more than 10% in under 24 hours as markets participants reacted to an executive order announced by President Joe Biden.
The digital currency rose to as much as $42,577 today, up more than 10% in the space of 24 hours, CoinDesk data shows.
More recently, the cryptocurrency pulled back, trading below $41,000 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Biden Executive Order
Earlier today, Biden announced the first “First Whole-of-Government Strategy” for digital assets. More specifically, he ordered varying federal agencies to work together in formulating policy.
The president’s executive order emphasized that any policies designed for digital assets should protect not only investors, but also consumers, companies and the broader financial system.
While the aforementioned order was published today, market participants got a better sense of its industry friendly approach after Treasury Secretary Janet Yellen accidentally posted a press release regarding the matter last night.
“President Biden’s historic executive order calls for a coordinated and comprehensive approach to digital asset policy,” the statement noted.
MORE FOR YOU
“Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems,” it added.
U.S. Securities and Exchange Commission Chair Gary Gensler also weighed in, tweeting that he was looking forward to collaborating with other members of the federal government.
Bitcoin Technical Analysis
After the world’s most prominent digital currency pushed higher, several market experts shed some light on what technical traders should look for next.
“Bitcoin has remained in a consolidation pattern for much of 2022, bouncing between 34,000-38,000 on the lower end and 44,000-45,000 on the upper end,” said David Keller, chief market strategist at StockCharts.com.
“Today’s move higher pushes Bitcoin firmly toward the upper end of that range, but we would need to see a confirmed close above 45,000 to signal a new bullish phase for Bitcoin,” he stated.
Keller also mentioned the Relative Strength Index, which is designed to offer a better sense of how overbought or oversold an asset is.
“Momentum characteristics remain neutral with the RSI right around the 50 level. If Bitcoin continues to push higher, look for the RSI to break above 60 which would signal an influx of positive price momentum,” he added.
Finally, the analyst spoke to an important technical level the digital currency could encounter if it falls in value.
“If cryptos revert lower in the coming days, I would expect support at the recent swing low around 38,000.”
Ben Armstrong, founder of BitBoy Crypto, also weighed in.
“On March 9th, the Bitcoin price had a strong rise to the 42,951 level after an unintentional early release of Janet Yellen’s statement on Joe Biden’s executive order on crypto currency,” he stated.
“On a technical level the price of Bitcoin is forming an ascending triangle on the daily chart which is a bullish pattern typically breaking to the upside. However we do have some obstacles in the way,” said Armstrong.
“At the time of writing the price of BTC/USD is 41,843. Inorder to break to higher prices we need to get past the key level of resistance at 41,950 and then past the resistance level at the top of the ascending triangle at 44,450 which price has rejected off of four times,” he continued.
“If price breaks to the upside the current target is around the 55k range, at this point we would be approaching a golden pocket level which would act as a major level of resistance,” predicted Armstrong.
“If price breaks out of the ascending triangle to the downside the current target would be in the low 20k range which is near the previous cycles all time high,” he noted.
“A key factor to keep in mind is although the daily timeframe is looking very bullish and there may be some upside in store for BTC/USD, the longer weekly timeframe is actually looking very bearish.”
John Iadeluca, founder & CEO of multi-strategy fund Banz Capital, offered his two cents, specifying crucial levels of support and resistance.
“Technical Bitcoin traders should keep an eye on increasing selling pressure at the previously formed resistance levels of $42,500 and $45,000,” he stated.
“Additionally, $40,000 seems to continue demonstrating itself as a key level of support in Bitcoin price after the rally we’ve seen in the last 24 hours,” added Iadeluca.
Scott Melker, a crypto investor and analyst who is the host of The Wolf Of All Streets Podcast, also chimed in, identifying some additional price levels.
“The key levels are the areas surrounding 53k, 45.5k, 42k and 39.6k,” he stated.
“Each of these are areas of strong support and resistance on higher time frames.”
Tim Enneking, managing director of Digital Capital Management, spoke to bitcoin’s recent rally, as well as the key resistance it quickly hit.
“The recent jump on the relatively benign Biden executive order (and the general rebound in fiat equity markets) today blew BTC through what had been quite strong resistance – but then BTC ran face first into $42k. It squeaked by it and almost immediately fell back,” he stated.
“That level ($42k) has played a critical role for almost a full year. The December 4th spike down hit precisely that level before a dramatic rebound and it has been either strong resistance or support since January 5th.”
“Since that time BTC has briefly touched $33k and twice hit $46k but generally bounced around between $36k and $44k,” he noted.
Enneking offered further perspective on bitcoin’s outlook, speaking to key variables that could affect the digital currency’s price fluctuations. More specifically, he emphasized the digital asset’s tight relationship with important economic developments.
“Although very recently the correlation between BTC and US equity markets has dropped somewhat, the correlation to macroeconomic events remains high,” he stated.
“Thus, BTC’s moves for the immediate future will probably depend on event in and related to Ukraine more than any fundamental developments in the crypto space itself.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.