The price of Bitcoin (BTC) rose again in the last 24 hours, surpassing the US$59,000 barrier. Is the current movement just a correction of the last drop or the start of a new uptrend?
With a daily increase of 3.5%, BTC is heading for its second day of increase amid a turbulent week. The day before, the cryptocurrency formed a bottom at $56,500 – its lowest price in 64 days.
Check out what the main market indicators have to signal about the future of Bitcoin.
Holders aim for new high
The 90-day Coin Days Destroyed (CDD) shows that long-term Bitcoin holders are increasingly optimistic about a new long-term high.
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The current drop in the on-chain indicator, therefore, shows that this group is not likely to sell its reserves. This occurs even as BTC records new records and then declines over the last 90 days.
Furthermore, Bitcoin’s Market Value to Realized Value (MVRV) ratio, which measures investors’ profit or loss, corroborates this view.
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Historically, BTC stops declines and rises again when the indicator is between -8% to -21%. This makes the current moment an opportunity for new purchases. If the bulls get excited, this could generate new upward momentum capable of making the price seek new tops.
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Bitcoin price at $70,000 in May
The weekly chart shows that Bitcoin continues to trade within a bull flag, with the current jump occurring after the price approached the support zone of this pattern.
The flag pattern, on the other hand, is characterized by a sharp price movement followed by a period of consolidation in the form of a rectangular flag. Thus, the breakout of the flag pattern indicates the continuation of the uptrend.
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The target for an eventual breakout, according to the principles of technical analysis, is at US$92,505. As this target is still very far away and would represent a new historical price high, a more realistic scenario would be for the price to rise to the top of the flag, close to US$73,000.
On the other hand, a further drop below the pattern would be able to send BTC price towards the next support zone at $52,000.
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