Sunday, June 23, 2024

Bitcoin Expected to Rally to $56K as Nasdaq Breaks Out of Bull Flag.

Martin S. (Buzzy) Schwartz, the champion trader of Wall Street, stated in his book “Pit Bull” that according to the first law of physics, an object in motion will remain in motion unless an external force acts upon it.

Bitcoin (BTC) has experienced an impressive surge of almost 50% in the first seven weeks of the year, hitting a six-month peak of $24,900. This boost was mainly due to favorable factors, such as the positive sentiment in conventional markets. Despite the Federal Reserve’s concerns and the subsequent rise in Treasury yields, the cryptocurrency market and the Nasdaq index, which tech companies on Wall Street dominate, have shown resilience.

According to a chart analyst, an anticipated upward trend may result in Bitcoin’s value more than doubling over the next few months.

William Noble, the research director at Emerging Assets Group and former analyst at Goldman Sachs and Morgan Stanley, said to CoinDesk that Bitcoin is currently breaking out of a long consolidation pattern. He further added that there is a saying which goes, “the larger the base, the higher the rise,” suggesting that the longer the consolidation, the more significant the potential upswing.

Noble, who had accurately predicted Bitcoin’s surge from $20,000 to $40,000 in late 2020, stated that Bitcoin could transition from consolidation to another exponential increase that would take it back to $56,000.

In cryptocurrency, the phrase “going parabolic” is commonly used to indicate an anticipated sudden, aggressive upward movement with minimal interruptions.

Noble mentioned that Bitcoin’s current bullish resurgence comes after a long duration of stagnant trading during the bear market’s lows, around the $18,000 mark. This period is also known as the basing pattern.

The relative strength index (RSI), a momentum indicator that is commonly monitored, has shown a bullish divergence on the weekly chart, signaling an end to the previous downtrend.

When the RSI indicator fails to match a new low on the price chart, as in November 2022, it indicates a bullish divergence. This situation suggests that the bears’ influence is waning, and the bulls are becoming stronger.

Nasdaq’s bull flag

Crypto bulls received further positive news as Nasdaq broke out of a bullish flag pattern, a technical trend recognized for accelerating an uptrend. Additionally, Bitcoin’s 90-day correlation coefficient with Nasdaq has risen to 0.75, suggesting that both assets are moving in sync.

Noble pointed out that there is currently a bull flag pattern in Nasdaq. He mentioned a common phrase used in trading: “flags fly at half-mast.” This saying suggests that the Nasdaq may experience another significant upward move, possibly leading to a new all-time high.

A bull flag pattern occurs when a correction takes place after a sharp upward trend. A breakout from the flag pattern is generally seen as a confirmation of the continuation of the broader uptrend.

Between March 2020 and October 2022, Nasdaq experienced a decline of 37% over 11 months. Despite the severity of the drop, it appeared to be a correction within the larger upward trend, and it formed a flag pattern on the weekly chart. This pattern recently came to an end with a bullish breakout.

Noble suggested that it’s possible for a new bull market in stocks to emerging, one that closely resembles the previous bull market. In other words, the cryptocurrency and equities markets could experience a surprisingly strong year in 2023.

As pointed out by Declan Fallon, a well-known analyst, Nasdaq’s daily chart also reflects a breakout from a bull flag pattern.

Potential breakout in ether

Ether (ETH), the second-largest cryptocurrency in market value, has not yet broken out of an expanding triangle pattern. This pattern has been identified using trendlines that connect the highs and lows registered between January 21st and February 2nd, as well as January 25th and February 13th.

According to Noble, if a breakout were to occur, there is a possibility that Ethereum’s native token could experience significant gains.

Noble stated that ETH’s expanding triangle pattern is potentially a positive development. He referred to similar patterns he observed in the stock market back in 2009 and 2010 following the global financial crisis. In particular, he noted the S&P 500’s expanding triangle breakout in 2009 as an example.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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