Bitcoin (btc) It's been an excellent few months, as bulls shrugged off a rising US dollar and Treasury yields to push the leading cryptocurrency to its highest level since late 2021.
This is the message from 10X Research after studying past data and a technical analysis indicator called the Relative Strength Index (RSI). Let's discuss both in more detail.
The theory that Bitcoin, the leading cryptocurrency by market cap, bottoms 12 to 16 months before the halving and sets bullish trends a year before and after the halving is now well known.
More importantly for traders, the previous three cycles revolved around the halving, with prices rising more than 30% in the eight weeks before the quadrennial event, reducing the pace of supply expansion by 50%. The halving scheduled for April 19 will reduce the reward per block to 3.25 BTC from 6.5 BTC.
“Bitcoin rises 32% on average in the 60 days before the halving,” Markus Thelen, founder of 10X Research, told CoinDesk.
At press time, Bitcoin was trading near $52,000. A 32% rise from here, according to previous data, means prices could trade near the record $69,000 level on or before the halving day.
“The closer we get to the Bitcoin halving, the more Bitcoin is likely to rise, as evidence from the last three halvings shows. And this time will be no different given that the perception within the cryptocurrency community is high that the halving is bullish,” Thielen added. “This perception is undoubtedly flowing into TradeFi community, which is aggressively buying Bitcoin ETFs ahead of the halving.”
Strong inflows into US-based exchange-traded funds (ETFs) indicate a bullish mood among traditional investors. Regulated ETFs allow investors to gain exposure to cryptocurrencies, bypassing the hassle of storing coins.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum indicator that measures the speed and variability of price movements over a specified period, usually 14 days, a week, or a month. Readings above 70 indicate strong upward momentum in prices.
A week ago, Bitcoin's 14-day Relative Strength Index crossed above 80 for the first time since December. 12 out of 14 previous RSI signals heralded accelerating uptrends, resulting in average gains of 54% in the following 60 days, according to 10X Research.
“For reference, Bitcoin was trading at $48,294 when the last signal was triggered, and if history (average return +54% in 60 days) is any guide, Bitcoin could rise to $74,600 based on this signal.” “Thelen pointed out.
Past performance does not guarantee future results, and macroeconomic factors alone can make or break trends.
However, the current macro picture looks supportive of increased risk appetite, thanks to the US The most motivating run Financial policy since the Goldman Sachs years He was aroused Year-end forecast for the S&P 500 rose 4% to 5,200, citing expectations for strong global economic growth and a weak dollar.
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