Momentum for Bitcoin prices have been bullish, with $BTC propelled to a new all-time high above $123,000. Meanwhile, BTC’s recent 9% weekly surge was its strongest since May. This rally smashed through several crucial resistance levels on the way and catapulted Bitcoin price into uncharted waters above $120k.
This past price action provided a clear indication of a breakout from a multi-year consolidation period. Within three weeks, on September 22, prices jumped from just over $109,231 to more than $119,000, marking a huge reversal in trader mood. Technical indicators further support this bullish outlook.
Bitcoin’s Relative Strength Index (RSI) on the weekly chart is currently at 71. This puts it into overbought territory, which oftentimes can be a bullish sign because it indicates strong buying pressure. In addition, the Average Directional Index (ADX) reading of 27 affirms that Bitcoin boasts a strong-trending market.
Volume profiles show 100 different times of accumulation between $90,000-$110,000. This build up has provided an incredibly strong base for Bitcoin’s further upward momentum. Above $120,000, declining volume indicates a lessening of resistance, making way for potential additional price appreciation.
The important resistance levels are found near $126,554 and $134,371. Regardless, these levels will be key in determining how far the current rally will carry. The first line of support for Bitcoin lies at around $115,575, with stronger support at approximately $110,500.
Similarly, the 50-week Exponential Moving Average (EMA) for Bitcoin – BTC – is still far above the metric’s 200-week EMA. This is a long-term bullish reversal – a sign of persistent, long-term positive economic momentum. The Crypto Fear & Greed Index has reached 72 as well, signaling increasing bullish sentiment about Bitcoin.
Prediction markets offer a few more pieces of evidence to understand market expectations. These markets are currently pricing a 91% probability that Bitcoin will be above $100,000 by July. On top of that, there is a 76% probability Bitcoin will get to $125k before the first major retracement down to $105k.
Investor confidence seems to be on the rise, helping to add to the greater buying pressure. This breakout above $120,000 has sent Bitcoin more interest and investment to what they call the smart money. This broader surge is part of a general trend of broader institutional and retail adoption of cryptocurrencies.
Positive technical indicators combined with strong volume accumulation paint an optimistic outlook for Bitcoin. Furthermore, positive prediction market data backs up this bullish prognosis for its short-term future. Nevertheless, investors are cautioned to be on guard for future pullbacks and volatility, especially with the RSI levels in overbought territory. Keeping an eye on major technical support and resistance levels will be important for weathering possible market volatility in the bottom half of 2023.
