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Bitcoin Bulls Brace For Breakout Towards $40,000 as This Bullish Technical Pattern Forms – Where Next for the BTC Price?

Bitcoin enthusiasts are anticipating a potential upward surge in the market, eyeing a challenge of the psychologically significant $40,000 threshold. This optimism stems from the recent emergence of a bullish short-term technical pattern known as an ascending triangle.

As of the latest data, the BTC price hovers in the $37,600 range, exhibiting some intra-day volatility on Monday due to reports suggesting that the US Department of Justice and Binance are nearing a multi-billion-dollar settlement to resolve a criminal investigation into the crypto exchange.

Despite these developments, the overall macro trading environment currently favors cryptocurrencies. The resurgence of US stocks, coupled with declining US government bond yields and a weakening US dollar fueled by expectations of future interest rate cuts by the Fed, provides a favorable backdrop. Additionally, ongoing optimism surrounding the potential approval of spot Bitcoin ETFs in the near term suggests that the risks associated with BTC price movements lean strongly toward the upside in the days and weeks ahead.

The short-term bullish perspective on Bitcoin is reinforced by the formation of an ascending triangle. This cryptocurrency has been bolstered by an uptrend that traces back to late October, with robust support identified at its 21-day moving average (21DMA) in the previous week.

This positive trend, upward momentum has encountered resistance at the $38,000 mark. Notably, the repeated testing of this level suggests that sellers, primarily comprising investors capitalizing on recent gains, might be reaching a point of exhaustion. This exhaustion could potentially pave the way for another significant upward movement in the market.

The 14-Day Relative Strength Index (RSI) for Bitcoin, a metric indicating market overbought or oversold conditions, has recently reverted to neutral territory. After signaling overbought conditions for a few weeks, this shift implies the potential for renewed buying pressure, particularly suggesting that a breakthrough beyond $38,000 could have sustained momentum.

This positive indicator, a potential counterpoint to the short-term bullish narrative emerges from on-chain signals. BTC token inflows to exchanges have increased in recent weeks, particularly after Bitcoin surpassed the $35,000 mark, hinting at a potential increase in profit-taking activities. It’s worth noting, however, that similar conditions were observed from February to May without preventing the BTC price from advancing further during that period.

Where Next for Bitcoin (BTC)?

Should Bitcoin successfully surpass the $38,000 mark, the subsequent logical objective would be a swift examination of $40,000, marking the first occurrence since April 2022. Once this pivotal psychological threshold is breached, there appear to be no significant technical obstacles before revisiting the 2022 highs at $48,200.

Given the macroeconomic landscape poised to become a substantial tailwind for Bitcoin, contingent on ongoing indications of economic slowdown in the United States and the potential for near-term interest rate reductions, coupled with imminent approvals for spot Bitcoin ETFs and the forthcoming halving of the Bitcoin inflation rate in April 2024, a multitude of optimistic narratives exists to bolster expectations of further short-term growth in the cryptocurrency market.

In parallel, Matrixport’s analysis suggests that when Bitcoin has already gained over 100% by this point in the year, there is a 71% likelihood that the cryptocurrency will conclude the year at even higher levels, with year-end upswings averaging around 65%. Markus Thielen, the head of research at Matrixport, emphasized that, according to these statistics, Bitcoin maintains the potential for upward movement, and a year-end rally of approximately +65% could propel prices back to $56,000.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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