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Bitcoin (BTC), the largest cryptocurrency by market cap, is currently showing signs of a new momentum refresh and the beginning of a newly formed bull run. Market analyst Justin Bennet accurately predicted this move, citing recent range highs and a cluster of short liquidations in the $27,500 area.
However, Bennet suggests an expected market between $27,500 and $28,250. He further claimed:
Bitcoin’s pullback today is not surprising, given the aggressiveness of the weekend rally. The pullback will remain constructive as long as Bitcoin can stay above $27,500 on a 4-hour and daily closing basis.
Is Bitcoin On The Verge Of Reaching $30,000 Again?
Furthermore, Bennet suggests a sustained break below Bitcoin’s current trading area would confirm a deviation and expose the Chicago Mercantile Exchange (CME) gap at $26,900.
To understand what a CME gap is, it’s important to know that Bitcoin futures are traded on the Chicago Mercantile Exchange. When the CME closes for the weekend, there can be price movements in Bitcoin that are not reflected in the futures market. This can create a gap between the Friday close and Monday open on the CME chart, known as a CME gap.
However, Bitcoin is trading above a key resistance level, as indicated by the 50-day Moving Average (MA), noted in the chart below by the brown line. This level could support Bitcoin in the short term and prevent further price drops in the $27,440 area.
It remains to be seen if Bitcoin can consolidate above this key indicator and maintain its momentum. If it successfully manages to do so, the next target could be to consolidate above $28,000 and break out of the current range, as suggested by analyst Justin Bennet. This could pave the way for Bitcoin to reconquer the $30,000 level.
BTC Could Reach $300,000 Or Drop To $3,000
Moreover, Bitcoin’s volatility has been compressing over time, according to trader Jackis, who believes this compression could lead to a significant price movement in 2024. He predicts that once Bitcoin leaves this compression phase in 2024, it could drop to $3,000 or soar to $300,000.
Jackis further claimed that this potential price movement could mark the next stage of Bitcoin’s evolution, as it moves from the “Early adopters” phase to the “Vast majority” stage. As more individuals and institutions adopt Bitcoin, its price and volatility will likely be impacted.
However, according to Glassnode co-founder James Check, the headwinds that have kept Bitcoin’s price under $30,000 include the strength of the US Dollar (DXY), a bounce in interest rates, and the risk of further Federal Reserve interest rate hikes. Nonetheless, he believes that the market may be about to turn and that Bitcoin may be poised for a rally.
While the Nasdaq has been used as an indicator of Bitcoin’s potential rally, the Glassnode co-founder believes other factors are at play. He sees a potential turn in the DXY at levels of 106-107, potentially leading to a reversal in interest rates.
The US Dollar Index measures the value of the US Dollar against a basket of other currencies. A stronger DXY can be seen as a headwind for Bitcoin, making the cryptocurrency relatively more expensive for holders of other currencies.
However, the Glassnode co-founder believes that the DXY may be nearing a potential turn, which could provide a tailwind for Bitcoin. Additionally, a reversal in interest rates could also provide a boost to Bitcoin’s price.
Featured image from iStock, chart from TradingView.com