Bitcoin fractal analyst explains: this is why bitcoin will reach $50,000
Bitcoin is showing signs of continuing its upward trend and reaching a new record high. This assessment has now been revealed by analysts at TradingShot.
The independent market analysis portal wrote in a note on Sunday that it sees the BTC/USD exchange rate reaching $50,000. The bullish Bitcoin Bank outlook referenced an October 2020 fractal that sent the pair’s bid from $11,000 to its all-time high near $42,000 in early January.
Bitcoin at $50,000
TradingShot analysts used candlestick patterns in conjunction with moving averages (MA) to identify potential reversal and continuation patterns in the bitcoin market. For example, the cryptocurrency broke out above a descending trendline resistance in October 2020, only to retest it later as support after being rejected by an ascending channel.
It later tested the 50-period MA as support, bounced back and reached new highs.
Bitcoin’s 2020 fractal shows that the move is towards $50,000. Source: BTCUSD on TradingView.com
In February 2021, bitcoin price action looked halfway the same. Analysts at TradingShot noted that BTC/USD broke out above the „lower high zone“ but encountered rejection at the top of the emerging uptrend channel.
„At the moment, Bitcoin is retreating towards the 4H MA50 after the rejection at the top of the channel up,“ the analysts said. „Since the lower highs zone has been broken, will the 4H MA50 or MA200 be enough to acquire new buyers? If so, this could be the last confirmation we need before the test of 50k.“
TradingShot’s bullish analysis comes at a time when Bitcoin (Go to Buy Bitcoin Guide) has repeatedly failed to break through the $40,000 level. Most recently, Bitcoin’s attempt to close above the said level was met with moderate selling pressure from day traders.
Nevertheless, the weakness to the upside coincided with a stronger US dollar and steeper yield curves.
Encouraging prospects for the US economic recovery combined with the escalation of US President Joe Biden’s $1.9 trillion stimulus programme prompted investors to increase their bids in risk markets – a reflation trade. The capital reallocation drove Wall Street indices higher but weighed on safe havens – including gold and government bonds.
Yields rise when debt prices fall. They appear to be strengthening the US dollar, which traded higher against other major foreign currencies last week.
On the other hand, Bitcoin narrowly escaped its short-term downward correction after Tesla founder Elon Musk endorsed it in public forums.
Nonetheless, excessive valuations after Bitcoin’s 900-plus percent rally (Click here for Bitcoin Weekly Outlook) risk larger corrections in the future, believes Hussein Sayed, chief market strategist at FXTM Gulf and MENA.
„There is no doubt that valuations are extremely stretched, especially in the tech sector,“ Sayed said. „Wild moves in other risk assets like cryptocurrencies are also indicative of excessive risk appetite.“