The current chart development of the Bitcoin price rate can be read as a battle between buyers and sellers at the important resistance area of $35,000. However, this year’s trend indicates that a significant rise could occur when this resistance is broken. So what is the next target for the Bitcoin exchange rate in the event of an increase?
First, let’s look at the daily chart. Since the beginning of the year, the Bitcoin price has shown a noticeable upward trend. We opened January with values around $16,000. The price has therefore increased by almost 120% this year. It recently hit the critical resistance area around $35,000. A bearish divergence with the Relative Strength Index (RSI) indicator tells us that sellers are present. If the buyer successfully breaks this level, then there is room for further growth. With regard to the bearish divergence, however, a longer consolidation phase and possible smaller retracements can be expected during the fight.
On the 4-hour chart, it can be seen that the Bitcoin price has surpassed its previous high and is trying to break the $35,000 resistance with strong momentum. In the event of a rejection, a possible decline to $31,800 can be judged from the Fibonacci retracement. If the dynamics increase and the resistance is broken, growth can be expected, and quite significant. We can expect to test $38,500 or even $40,000.
NVT Golden Cross shows overvaluation
The Golden Cross NVT (Network Value to Transaction) indicator shows the market capitalization of Bitcoin divided by the total volume of transactions. The value is currently above 2.2. This is normally interpreted as an overstatement. In the historical context, however, a value above 2.2 has always indicated an incipient bull market. Some analysts are more inclined to the opinion of the beginning of the bull market than to fears of overheating and an impending decline.
It is evident that there is currently a battle between sellers and buyers. A large amount of new capital is flowing into the market and the price shows further potential for growth. We have only about 60 days left until the Securities and Exchange Commission (SEC) will issue an ETF statement, and the next halving is also knocking on the door. Time will tell if this is truly a new bull market or just a bull trap. What is your opinion?