The bounce puts Bitcoin on track to consolidate gains above $40k, suggesting a fresh target lies above the $43k resistance line.
BTC price could mirror movements in the S&P 500 as the asset and the stocks are highly correlated.
Bitcoin’s recovery continued on Monday after the weekend’s break above $40,000, with bulls testing resistance above $43,000.
The gains come after the stock market also saw the S&P 500 post its best week of the year so far, even as central banks take aggressive hawkish stances amid rising inflation. Bitcoin’s upward move could also have been fueled by positive news from automaker Tesla Inc., which on Monday said it holds nearly $2 billion worth of BTC.
So, what are analysts saying about Bitcoin’s short-term price picture?
On-chain analysis platform Santiment says Bitcoin’s high correlation with stocks means further price action could very well track the S&P 500. According to the platform, fresh gains for the benchmark index will likely result in BTC price going up.
“A positive Monday will be a good sign for the week to come, and a continuation of a cryptocurrency rebound,” Santiment wrote.
US stocks are up in early trades on Monday, with the S&P 500 adding 0.21% and the Nasdaq and Dow also up.
Pseudonymous crypto trader and Bitcoin analyst Rekt Capital says Bitcoin seeing a new weekly close in the green “has partially confirmed a break back into the $38000-$43000 range.”
The upside also had Bitcoin hovering near its 50-week exponential moving average, which the analyst says is “a key Bull Market moving average.”
“The EMA represents a price point of ~$44000 and may figure as a resistance. However, turning it back into support would restore macro bullish bias for Bitcoin,” he added.
Chart showing Bitcoin’s 50-week EMA at $44,000, a key price level for bulls. Source: Rekt Capital on Twitter.
According to another analyst, the bounce means Bitcoin’s most “significant” barrier is now at $48,400.
Josh Rager, another very popular crypto analyst says the strong weekly close could aid bulls’ push for a breakout to $50,000. He says the chances of more upward momentum will increase if BTC/USD manages another green week.
Given these perspectives, a bullish week would likely see BTC/USD turn the $40-$3k supply wall into a demand zone. If bulls achieve this, they are likely to mirror the rebound seen last July, which came after a 50%+ drawdown that started in May.
Bitcoin dipped more than 20% in January and lost more than 50% of its value before the rebound from lows of $33k.
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