In the previous article, we have mentioned all the key evidence pointing to a potential bullish move in Bitcoin, and it has happened.
The key resistance was broken
In the last week, the price of Bitcoin has risen by almost 17%, with the top 10 Alt-Coins showing a comparable 11-20% increase. The price increments have brought about a growth of about $40 Billion in the total capitalization of the crypto market. Over at the Crypto Fear and Greed Index, an index that quantifies the emotions and sentiments from different sources is currently pointing at a market that is facing “Extreme Greed.”
Following last week’s article, we mentioned a few key technical aspects of Bitcoin prices. As of date. not only have prices broke out of the 3-month range, but it also broke the descending triangle pattern formed. Furthermore, 2 key resistance levels (10,000 and 10,500) have also experienced clear breakouts.
The Bloomberg Galaxy Crypto Index (BGCI), a benchmark index designed to measure the performance of the largest cryptocurrencies traded is fast approaching the 500 level, a level which it failed to breach in the previous two attempts. On the technical front, one of the most popular indicators to measure overbought and oversold levels — the Relative strength index (RSI) is already currently well above 80, indicating a clear sign that Bitcoin may be overbought. As prices of Bitcoin stabilizes around $11,000, a key question arises — is Bitcoin overbought now?
US Federal open market committee actions
“The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals,” re-emphasized the Fed in its recent FOMC statement.
In light of the ongoing public health crisis weighing heavily on inflation, employment, and economic activity, the Fed has decided to maintain the target rate unchanged in the range of 0 to 0.25%. The Fed is promising to maintain this target until “it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
Also, the Fed will be increasing its holdings of Treasury securities and mortgage-backed securities and will further continue to offer large-scale overnight and term repurchase agreement operations.
All of these facets can help bitcoin push higher as Kris Amos, CEO at the Alpha Roc Technologies said, bitcoin is “going to have a strong catalyst for the next move higher, because we’re still far away from the record highs,” of $20,000 hit in December 2017.
And once bitcoin breaks past these levels, interest will grow and “that’s just going to continue to add to that bullish momentum that should be spurring off of this dollar weakness,” he said.