Bitcoin opened this week in positive territories, looking to return to all-time highs after falling to three-week lows in the previous session.
The benchmark cryptocurrency was up 4.70% before the London's morning bell, hitting an intraday high of $ 47,500 after bouncing its simple moving average wave of 200-4H. Its strong pullback also helped it break through a downtrend line resistance that is part of a Falling Wedge Pattern .
In retrospect, traders perceive Falling Wedges as bullish reversal patterns that form when an asset slips lower while forming a sequence of highs and lows. This ends up creating two converging trend lines. Traders realize a bullish bias when the asset convincingly breaks the resistance of the Wedge, accompanied by higher volumes.
Bitcoin above $ 50,000
On Monday, Bitcoin posted a similar resistance breakout, with its volumes on a four chart stabilizing alongside. The uptrend has indicated that the cryptocurrency could see extended gains in the coming sessions, with levels above $ 50,000 looking like ideal prime bullish targets for the bulls.
Bitcoin exits the so-called bullish reversal pattern. Source: BTCUSD on TradingView.com
However, a convergence of the 50-4H simple moving average (the blue wave) and a horizontal resistance line near $ 52,170 should test bitcoin bulls before attempting to recover Wedge's ultimate primary targets above $ 58,000. a support zone between $ 43,000 and $ 45,500 must hold the ground to prevent bears from taking control or risk of lowering BTC / USD rates to lower the top $ 40,000 or $ 30,000.
Overall, the first upward moves this week show bears are losing focus in the short term, which should help Bitcoin maintain its rally to $ 50,000 at best.
Bitcoin's rally is inspired by US government bonds pick up on Friday and Monday. Meanwhile, the cryptocurrency expects to remain healthy also as data A stimulus proposal of 1, $ 9 trillion advance to House of Representatives.
Bill is now in Senate, controllede equally by Democrats and Republicans, with a deciding vote lying with Vice President Kamala Harris, a Democrat. This dramatically improved the likelihood of the bill becoming law even if the entire Republican Party votes against it.
Ecoinometrics analysts noted that the Federal Reserve holds approximately $ 1.5 trillion in its Treasury Gener account.
At the same time, Treasury Secretary Janet Yellen made it clear that her office plans to spend all the money to stay on track with Mr Biden's expansionary plans, which in addition to stimulus , also concerns a student loan cancellation worth $ 1.4 trillion andan additional $ 3 trillion spending on infrastructure projects.
"In this environment, I can only see Bitcoin's narrative as a hedge against the risk of rising inflation," the data analysis portal added.