Bitcoin’s 16% retracement this week after setting new all-time highs is likely a precursor to another parabolic rise in price, according to research from DecenTrader.
“As we attempt to break the previous all-time high of May this year, the prospect of a possible parabolic surge is building, as we saw in the later stages of previous bull runs,” he says. DecenTrader.
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Bitcoin recently had its first major technical update in years when Bitcoin Taproot was launched. Taproot is a series of technical updates that enable greater privacy, lower transaction costs, improved smart contract functionality, and the ability to scale using the Lightning Network.
These updates allow certain information on the Bitcoin blockchain to remain private, such as the conditions under which Bitcoin can be redeemed for expenses.
Bitcoin price in USD for a month
The last time Bitcoin had such a major update was the Segwit update in August 2017, which made the Bitcoin blockchain more secure and scalable.
“At the time, the price of Bitcoin was $ 4,000, then it rose to nearly $ 20,000 in the next four months,” says DecenTrader.
“Will we see a similar rally this time? Given how optimistic many macro indicators look right now, and the flood of new money pouring into cryptocurrencies, it is certainly possible. ”
Bitcoin’s price pullback in late November came as volumes remained quiet and sellers took advantage of high prices to turn a profit. The Relative Strength Index (RSI) on the daily chart is now in oversold territory, which is a reliable trigger for buyers to re-enter the market.
If the price of Bitcoin (BTC) falls below $ 57,000, the next target would be $ 53,000, which is the 100-day moving average.
BTC is still up and running at $ 85,000 to $ 90,000 in the next few weeks after ‘catching’ traders for leverage, DecenTrader says. Leveraged traders entered the market at the new all-time highs for BTC and were immediately burned out as the price rally faded, forcing them to liquidate their positions.
Bitcoin in USD and Relative Strength Index
Another bullish indicator is the number of “active directions” in relation to the price change, which is effective in identifying broad periods when BTC is either overvalued or undervalued.
The indicator has retreated in recent days, representing a precursor to a bullish rally in price, similar to what we saw earlier in the year.
The rate at which BTC is mined halves every four years, and that is traditionally followed by a parabolic rise in price.
The last ‘halving event’ was in mid-2020 and, although followed by a substantial price increase, it did not come close to the parabolic races experienced in previous halving, which may be a sign that BTC’s recent price spike is just the beginning of a much bigger move.
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