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Bitcoin breaking above the $ 40,000 level has again stimulated some degree of optimism in the market. In fact, this was also pointed out by a previous article, the same one observing that BTC has spent more time between $ 30,000 and $ 40,000 than $ 40,000 and $ 64,000 in recent weeks. Needless to say, recent hikes are not yet enough for a full recovery.
Maintaining a break out of the $ 42,000 level is what would really matter for BTC’s bullish continuity and here’s how it could play out.
What might the price action look like?
On the daily chart, the price of Bitcoin managed to break through the 50-day SMA. In addition, it also exceeded the 100-day SMA. At the time of writing, Bitcoin had registered gains of almost 38% in 11 days, closing in the green every day.
BTC / USDT on the Trading view
Trading volumes for Bitcoin also featured an active market and largely bullish sentiment. In addition, the crossing of the 20-day and 50-day EMAs also highlighted momentarily bullish signals.
Overall, while this may give the impression that the Bitcoin market is doing well, it may not be. Bitcoin analyst Benjamin Cowen, in a recent video, pointed out a trend that must be maintained for a true game changer.
This Bitcoin indicator will control the altcoin movement
According to Cowen, despite recent gains, most alts are still 50-60% down from their ATH. The kind of market conditions required for altcoins to really pick up were last seen between October and December of last year, he said. This means that Bitcoin must overcome the 20 week SMA and stay there, as it did then.
Basically, the price of Bitcoin should hold the 20 week moving average as support and then continue to rise. This is how altcoins can also follow. On the contrary, if Bitcoin is rejected, altcoins will also fall faster, Cowen argued.
Market expectations and outlook
The general market looks bullish right now, but it would not be advisable to take a step at this time and watch the market for a few more days as these price points hold up would be a wise thing to do. That being said, it is worth noting that Bitcoin’s dominance has been at an all time high since May. Development activity for Bitcoin has also shown signs of strengthening.
CTB development activity; Source: Sanbase
In fact, Dev. activity on the BTC network is now equal to its end-April levels, the highest for three months. In addition, profitable UTXOs also saw a slight increase – an almost parabolic increase. Its current levels are in fact the highest seen since early May.
Source: Glassnode
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