2023-4-4

The past seven days have made for quite an exciting week in the cryptocurrency market, particularly Bitcoin. However, while some of the events weren’t particularly positive for crypto, the market stabilized and gained around $14 billion in the process. And for the first time since June 2022, Bitcoin is on the brink of re-emerging above the $30,000 level.

Traditional Economic Failures Lead to Crypto Rally

In March, some of the largest crypto-friendly banks, like Silvergate and Signature, collapsed due to a lack of liquidity. Also, regulators shuttered the largest bank for tech startups, Silicon Valley Bank (SVB). In addition to these recent bank failures, the Fed also hiked their interest rate by 0.25%, against the suggestion of many financial experts. While this was terrible news for the traditional markets, it proved favorable for Bitcoin and other cryptocurrencies considered stores of value.

The present macroeconomic landscape set the path for the rise of an “alternative currency.” Investors have turned to Bitcoin and gold, as these safe haven assets have experienced explosive upside volatility. Amid the ongoing economic crisis, Bitcoin has widely outperformed the S&P 500, Nasdaq, and other traditional assets.

Bitcoin Price Analysis

The largest cryptocurrency by market cap, Bitcoin, has been on a rollercoaster for the past few days. Its price plummeted by $1,500 on Monday when the US CFTC sued Binance and Changpeng Zhao. However, the ongoing distress in the traditional financial system has helped the bulls push Bitcoin above $29,000 on March 30.

But that was short-lived as the bears did not give up yet and kept selling, leading to the fall of BTC price. As a result, BTC price fell to around $27,600 on Friday. The last day of March was more favorable for the cryptocurrency as it regained over $1,000 in an hour, achieving a daily high of $28,800. BTC has lost a few hundred dollars since then, but it still continues to stand in the green on a weekly scale, trading at $28,400 at the time of writing.

Bitcoin’s market capitalization is near $550 billion once more, and its dominance over the altcoins is close to 46.50%.

However, if Bitcoin fails to cross the $29,000 mark again, it can potentially return to the 20-day exponential moving average of $26,700. Furthermore, if the price falls below the 20-day EMA, BTC can fall to a breakout level of $25,250. A fall below this level can result in Bitcoin sliding to the 200-day simple moving average of $20,350. However, market sentiments and trading volume on popular exchanges like Gate.io suggest that traders will continue to buy the dip, increasing the possibility of breaking out above $29,000. If the bulls succeed in their endeavor, BTC can soar to the $30,000–$32,500 resistance zone.

Ethereum Price Analysis

Currently trading at $1,827, Ethereum is up 5% in the last seven days. But Ethereum has been facing strong resistance near the $1,850 mark this week, indicating bears are fiercely trying to protect this level. However, the bulls have not given up, as Ethereum’s rising 20-day EMA and the relative strength index (RSI) are still positive. This means there can be a breakout above the $1,850 mark anytime now. And if that happens, Ethereum might resume its upward movement and reach the resistance zone between $2,000 and $2,200.

On the other hand, if the price falls below the 20-day EMA, it would mean that the bulls have ceded ground to the bears. That could result in Ethereum falling to a strong resistance level of $1,680. Furthermore, with a breakout below this level, Ethereum price can fall further to $1,461.

Can Bitcoin Reach $1 million in The New Cycle?

There has been a lot of talk around Bitcoin’s price reaching $1 million, with ex-Coinbase CTO Balaji Srinivasan betting it to happen within the next 90 days. Srinivasan says that there is an impending crisis that will lead to the deflation of the US dollar. This, in turn, might cause a hyperinflation scenario that would push the price of BTC to $1 million. But is that a reasonable assumption? And if not $1 million, what price can Bitcoin reach by its historical price movements?

The Bitcoin network is designed to cut the rate of newly issued tokens by half roughly once every four years. Historically, these “halvings” have been a significant catalyst for Bitcoin Bull Markets and have unfailingly sent Bitcoin’s price to new all-time highs within two years of their arrival. We know from past data that Bitcoin prices peak within 368 to 550 days and bottom within 779 to 914 days after the halving. Using the past peaks and bottoms, we can predict new tops of over $200,000 in 2025 and $500,000 in 2029.

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• Source: Plato Data Intelligence: PlatoData