Bitcoin is reportedly gearing up for a rally, according to a prediction by Marcus Sotiriou, Sales Trader at UK-based digital asset broker GlobalBlock.
According to his analysis, Bitcoin closed the week for the eighth consecutive time above $34,000. Ever since the sudden drop that began in May, bitcoin has held on to the $30,000 level.
Bitcoin continues to be in the $29,000-$42,000 range. If it doesn’t reach $42,000, it is technically in the middle of a downtrend. But some technical indicators seem to suggest that BTC is on the road to recovery.
Bollinger bands for example suggest that bitcoin is about to break upwards from this level. Indeed, their shape is reminiscent of what they were in September 2020. It is worth remembering that the bitcoin rally that took the price up to the record high of $65,000 started in October 2020.
Certainly several important pieces of news contributed to that price jump. The first was the integration of cryptocurrencies on PayPal, which came in October and led BTC to break the previous record of $20,000. In February, Tesla’s maxi investment of $1.5 billion boosted the price to a record high on 14 April.
But there is another technical indicator that should not be underestimated. Bitcoin is emerging from a downtrend on the daily RSI (Relative Strength Index) that began in January 2021.
According to the GlobalBlock analyst, with rising volumes and some positive price news in the coming days, bitcoin could return to test the $42,000 level.
The daily RSI also seems to suggest a rise. Marcus Sotiriou says:
“Bitcoin is showing further positive signs on the daily RSI as a bullish divergence continues to be in play (shown on the right). This shows that, because the RSI is trending up whilst price is trending down, bearish momentum is dying out”.
News that could affect bitcoin predictions
GlobalBlock notes that there are also a few events not to be overlooked. The first concerns a report from Coinshares that institutional investors have resumed buying cryptocurrencies, after 5 weeks of selling. This could be a positive factor.
Also of concern is the FBI’s warning that crypto exchanges and users may be victims of attacks aimed at stealing cryptocurrencies.
Finally, bad news for Ethereum. Australian blockchain-based company Power Ledger will abandon Ethereum and migrate to Solana. The company, which allows the exchange of renewable energy, preferred a faster and less energy-intensive blockchain. Ethereum has been blamed for all the limitations of the consensus mechanism, as well as low transactions per minute.