Bitcoin has climbed back to a three-month high of $68,000 in its latest attempt to escape from a months-long slump. Market analyst Egrag further anticipates that the cryptocurrency could rise to $170,000 if a major technical level holds in the next few months.
Bitcoin’s Price Action and Market Trends
Bitcoin has been displaying a positive and quite strong trend, overcoming several important barriers in the last couple of months. After reaching an all-time high of $74,000 in March 2024, Bitcoin went through a period of consolidation.
Its recent price hike of more than 2% from $66,000 to $68,000 has led many to believe this could mark the start of a longer bull market.
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The recent surge comes after Bitcoin was rejected at $65,000 and $66,508 on several occasions in the past few months. Nevertheless, with Bitcoin prices currently standing at around $67,600, most industry analysts expect it to quite likely break through $70,000 shortly.
Jonathan de Wet, CIO at Zerocap, has high expectations for Bitcoin. He said, “We see it at $70 000 in the coming weeks.” He also listed several technical reasons, such as a recent breakout as a stable ground for more climbing.
Key Technical Levels and Indicators
Egrag, a crypto analyst, has explained why Bitcoin’s 21 Exponential Moving Average (EMA) trendline is crucial for maintaining the current optimistic trend. In his analysis, he stated that Bitcoin has to trade above $67,285 by the end of October to remain on the upward path towards $170,000.
As noted by Egrag, the previous cycles of Bitcoin indicate similar upward movements after it closes above the 21 EMA. Notably, the price of Bitcoin experienced significant upswings in the bull markets of 2016 and 2020 after breaking this trendline.
He said if this level is not held, it could result in a short-term correction. The overall trend for the market remains up.
Egrag also identified the Fibonacci level 1.618 as a key level for this Bitcoin cycle. In his estimation, if the current trend persists, Bitcoin may hit $170,000, a 250% spike from the current price.
Rising Open Interest and Bull Market Signals
Besides the price action, other parameters on the market reveal the previous sentiment of the bulls. The open interest for Bitcoin futures has now crossed $19 billion. That is a new record which shows that more investors are getting involved in this market.
This is normally perceived as a signal that the price is likely to rise further as market activity increases.
Additionally, on-chain metrics, such as Bitcoin active addresses, have significantly increased user activity. Data from CryptoQuant indicates that Bitcoin’s active address momentum has been rising for the past 45 days.
Historically, increased user engagement has been associated with bullish market cycles, suggesting that the current rally may have more room to grow.
Market Sentiment and Broader Economic Factors
Several other factors also point to the positive outlook for Bitcoin’s price. Such positive sentiments stem from political situations in the U.S., especially from presidential candidates who are supportive of the cryptocurrency market.
The 45th President of the United States, Donald Trump, who is vying for the presidency in the 2024 election, has stated his desire to make the US the world’s leader in cryptocurrency. This move could encourage more institutions to invest in the market and increase confidence in the space.
Arthur Hayes of BitMEX also pointed out that Geopolitical tensions in the Middle East could increase Bitcoin prices. According to Hayes, more government spending due to these conflicts could lead to inflation, making investors look for other assets such as Bitcoin.
