Will it really be different this time? Bitcoin is back to its yearly opening level, but traders don’t know what to expect.
Bitcoin (BTC) starts the last week of March with a bang after returning to its yearly opening price above $46,000.
In a surprisingly strong move higher for a weekend, the BTC/USD pair started to rise on Saturday, continuing overnight to challenge its highs since the start of 2022.
Coming against a macroclimate of considerable uncertainty, the strength of Bitcoin is causing uncertainty; naturally, investors take this with a grain of salt this month. The reaction is understandable, as previous attempts to break out of its multi-month trading range have ended in failure.
Despite periods of volatility, the bulls have always been disappointed and the Bitcoin price has not only retraced but also revisited the lower end of its range, costing both long and short positions dearly.
However, the hope is that this time it will really be different: analysts have long argued that just a break above the top of the range, formed by the yearly open of around $46,200, would be enough to trigger a paradigm shift.
Now that this is in action on the charts, attention is turning to the final hurdle: cementing these multi-month resistance levels as support.
With the process underway on Monday, Cointelegraph looks at possible triggers that could help or hinder this major episode in Bitcoin price action.
The Importance of the $46,000 Level
“Little by little and then suddenly” or pure chance? Traders are still trying to make sense of Bitcoin’s newfound strength this week.
There has been a missing chart view since the New Year: BTC/USD is back at $47,000. After jumping nearly $3,000 in 24 hours, the largest cryptocurrency dealt a firm blow to resistance levels that had held bulls firmly in place for months.
The importance of the $46,000 level has been a hot topic for almost as long – a return to the yearly open, many said, would be the sign that Bitcoin was ready for bigger things once again.
Nonetheless, few would have thought that the phenomenon would come ‘off the clock’, and suspicions about the real strength of the rally are naturally pervasive on social media as the week gets underway, just as they were when the own rally started.
On Twitter, user fooo – Mayor of Goblin Town (@bitcoinpanda69), summarized these suspicions like this, “march 2020 – ct was bearish, fooo was bullish; may 2021 ct was bullish, fooo was bearish; july 2021 ct was bearish, fooo was staking fooo’s entire reputation on more upside; november 2021 fooo began dumping, ct was bullish; now ct is bullish and fooo is bearish. Wholesome.”
However, even the most cautious voices are no longer ruling out the potential for further ascent, even if the long-term forecast remains downhill. On Twitter, user Pentoshi (@Pentosh1) posted the following, “$BTC update; Yearly open tagged. Flip to support then 50k next with potential move into 53k imo.”
Bull Market Tendency for BTC?
“Fundamental buying pressure for Bitcoin has now moved into bull market territory,” analyst and statistician Willy Woo reported.
Analyst Matthew Hyland, a key supporter of the $46,000 argument, said that the $52,000 level was the next long-term wall of resistance to breaking.
On Twitter posts, Hyland added that the move was preceded by a breakout in Bitcoin’s relative strength index (RSI) indicator, which itself is a classic sign of breakout trends.
The RSI assesses how overbought or oversold an asset is at a specific price, and in the case of Bitcoin, its score has been rising from a low since mid-January, according to data from Cointelegraph Markets Pro and TradingView.
Therefore, the further development of the RSI could dictate the extent of the rally, based on historical norms of behavior.
As it appears, “Cryptocurrency markets are in a steady uptrend as the supply shock kicks in. It will only take one bull run for this to return to all-time highs,” argued JRNY Crypto on Sunday. Therefore, we should be expecting cautiously an upward trend in cryptocurrencies.
By Audy Castaneda
