Bitcoin’s stealth rally over the past two weeks not only pushed it past a key level of $ 45,000 – it also put the world’s biggest cryptocurrency back in positive territory for the year.
The token rose as high as $ 47,583 in early Hong Kong trading, well above the $ 35,000-to-$ 45,000 range where it’s been stuck since early January. With the fresh gains, Bitcoin is now up about 1.2% for the year, compared to a 4.7% decline for the S&P 500.
If Bitcoin can keep breaking through “in a meaningful way,” it should gain a lot of upside momentum, said Matt Maley, chief market strategist at Miller Tabak + Co.
The coin has been stuck in a tight path as the Federal Reserve and other central banks remove some of the stimulus measures they put in place in response to the pandemic downturn. That means there’s less cash to go toward riskier assets, including crypto. In addition, digital currencies came under scrutiny with speculation swirling that they could be used to skirt Russian sanctions, although many analysts rebuff that claim.
Even so, Bitcoin and other tokens like Ether started a steady advance this month alongside broader increases in US stocks. But it took until the past day for Bitcoin to convincingly take out $ 45,000, a level it had only briefly touched since early January.
“As we test the top of the 2022 trading range for the fifth time, this is another one of these Bitcoin moments when the narrative could swiftly change and investors pile in, propelling the Bitcoin price higher,” said Antoni Trenchev, co-founder and managing partner at Nexo. “It might just be time to awaken from the Bitcoin-sideways slumber that’s been 2022.”
For all of Bitcoin’s recent strength, its performance has been bested over the past few days by alt coins like Cardano, Solana, Polkadot and Dogecoin. Cardano in particular has found a favor with traders, jumping 30% over the past five days. Those tokens remain down for 2022, however.
Bitcoin was well above its 50-day moving average, which currently sits around $ 41,085. That puts it around the 80th to 90th percentile and in the “overbought” range, according to Bespoke Investment Group. But, although that signals potential for a downturn in price for many assets, with Bitcoin it’s historically been the opposite, the firm said.
“When it has been similarly overbought in its past (over the last five years), it has averaged significant gains going out one to 12 months,” according to the Bespoke report.
When Bitcoin has been in the ninth decile of its spread versus its 50-day average, it’s historically risen 16% in the next month, is up 100% six months later, and has gained 274% after a year, according to data compiled by Restless.
Bitcon’s gains since mid-March – even as Russia’s war in Ukraine dragged on – it also bolstered it versus gold, its traditional safe-haven rival, which traded sideways during the period.
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