Analyst: Bitcoin bulls poised to break through $23,000

The leading RoboForex analyst Dmitry Gurkovsky explains potential scenarios for Bitcoin’s price movement.

Buyers continue to pick up Bitcoin during pullbacks. After testing the $17,600 level, the price quickly rose to $19,500, and earlier today broke through the $20,000 level. Many traders note that a drop below $18,000 ‘pushes’ investors to make new purchases.

BTC/USD quotes are steadily bouncing off an uptrend line that can be drawn on the asset’s four-hour chart. A breakout of it could trigger a correction, but the price remains above the line, underscoring bullish pressure.

Four-hour BTC/USD chart for Bitstamp from TradingView.

Moreover, a breakout of the downward trend line on the RSI indicator has been observed. Typically such a signal points to an imminent move upward, with a breakout of the nearest resistance and continued price growth.

Positive information is the growth in the total number of wallets holding more than 1 BTC. The figures are at record highs, showing that investors are continuing to accumulate cryptocurrency and are not yet considering selling. In 2020, the number of addresses with balances exceeding 1000 BTC grew significantly.

Digital yuan is not designed to replace world fiat currencies (such as the US dollar or the euro). Rather, such an asset is intended for a range of inter-company payments, as well as an investment vehicle. As the digital yuan develops, the ECB grows concerned about the digital euro trailing in this regard.

actively studies the possibilities of moving the country’s payment infrastructure to an electronic krona. Naturally, all these actions by authorities and central banks will only ‘fuel’ interest in the crypto industry as a whole, which should positively affect the prospects for continuing the rally in BTC/USD.

Insurance and pension funds are also ready to allocate a portion of their assets to Bitcoin. In percentage terms, such investments will be modest, but the fact that large companies intend to buy cryptocurrency may attract attention from traditional investors, who are still weighing whether to purchase digital assets.

Earlier, large private investors spoke of exiting gold to buy Bitcoin, as it fundamentally looks weaker as an asset, which is explained by the difficulty of moving and settling it. But the main driver of crypto popularity remains the declining yields of precious metals and the ever-growing profitability from investing in Bitcoin.

From a technical standpoint on the daily chart, a ‘Triangle’ pattern is visible. A breakout above its upper boundary with the price sustaining above $20,000 would point to a rise to $23,000 as the pattern plays out. An additional signal in its favour is the bounce off the support line on the RSI indicator.

For buyers, it will be crucial to breach the local high; otherwise, a pullback with the price dropping below $17,400 would indicate the end of the current trend. In that case, the height of the ‘Triangle’ pattern would need to be moved downward to determine the next target for the leading digital asset’s price.

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