Bitcoin shot past $40k easily earlier today and posted as high as $40.8k in between before shedding some value slightly to around $40.2k at press time. While bulls are stronger now and might look to break the menacing $42k resistance in the short-term but bears aren’t yet out of the picture. Let us discuss where the price index can go in the wake of $40k being breached again.
Bitcoin is coming back from a largely bearish 3-4 weeks or so. The cryptocurrency fell heavily from its $42k all-time high and spent most of the time wandering in oblivion between $30-$35k during this time. However, with this push forward, the bearish case for the cryptocurrency has weakened a lot, but they aren’t out of the picture, yet.
The immediate key levels to look for right now are $38k and $42k. If Bitcoin makes a high volume move below $38k, it would mean that bears are back in contention and may squeeze the price further down. However, if bulls can break the $42k ceiling, which is Bitcoin’s all-time high, we can see a big price breakout, possibly towards $50k.
The immediate short-term outlook of Bitcoin is quite bullish, but the bears can easily overcome it. This is because right now, key resistances still stand and they will complicate things going forward if the current rally runs out of steam quickly enough.
However, there are a number of key Bitcoin indicators that point to a sustained rally overall. For example, the number of wallet addresses with a lot of Bitcoin aka whales are continuing to increase. This shows that crypto is being bought at a rapid rate despite relatively high prices in the market. The whole promise of bears was that the market should slow down and retrace to lower levels because current situation is overbought. However, the thing with whales accumulating shows us that it is not the case and buyers are still willing to invest in the sector.
The accumulation of Bitcoin in large wallet addresses is couple with considerable outflows from wallets associated with Coinbase exchange. This shows us that not only whales are accumulating Bitcoin, they are doing so at crypto exchanges’ expense. With a shortage on these exchanges, Bitcoin can quickly start selling at a premium, thus jacking up the price index overall.
Bitcoin’s rise is also often coupled with altcoin’s loss. Many of these smaller cryptocurrencies are near their all-time high levels and may recede strongly in the coming days/weeks if Bitcoin can continue its foray upwards. So, there is also a rush to get more Bitcoin in the near future to consider that will increase its price index and its hold on the market’s proceedings.
Image source: pixabay.com
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