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During the past two weeks, Bitcoin has been on a secret rise. Not only did it reach a key level of $45,000, but it also put the world's biggest cryptocurrency back in the black for the year.
Even though the token has been stuck in a $35,000-to-$45,000 range since early January, it rose to $47,583. As a result of the new gains, Bitcoin is now up about 1.2 percent for the year. The S&P 500 has lost about 4.7 percent this year.
A market strategist at Miller Tabak + Co. says that if Bitcoin keeps breaking through "in a meaningful way," it should keep going up.
People have been removing some of the stimulus measures they put in place after the pandemic. The coin has been stuck in a tight spot. That means there's less money to invest in risky things, like crypto. In addition, digital currencies came under fire because of rumors that they could be used to get around Russian sanctions. Many analysts say that this isn't true.
Even so, this month, Bitcoin and other tokens like Ether started to rise steadily. This was in addition to a larger rise in U.S. stocks. However, it wasn't until the last day that Bitcoin took out $45,000, a level it had only briefly reached since early January.
It could be another one of those "Bitcoin moments" where the narrative quickly shifts and investors rush in, causing the price of Bitcoin to go up. Antoni Trenchev, a co-founder and managing partner at Nexo, said this. As of 2022, Bitcoin has been moving sideways. "It might be time to get out of that slumber," says the person.
An 'Overpriced' range
It doesn't matter how strong Bitcoin has been recently; in the last few days, alt coins like Dogecoin and Cardano have done better than it has. Cardano, in particular, has been a hit with traders. It has jumped 30% over the last five days. Those tokens, on the other hand, will stay down for 2022 at least.
In the last 50 days, the 50-day moving average for Bitcoin was above $41,085, which is where it is now. As a result, Bespoke Investment Group says this stock is in the "overbought" zone and is in the middle of the range from 80% to 90%. But, even though that could mean a drop in the value of many things, with Bitcoin it's always been the opposite, the company said.
"When it has been overbought in the past (over the last five years), it has made big gains in the next one to 12 months," says the report from Bespoke.
According to data from Bespoke, when Bitcoin has been in the ninth decile of the spread compared to its 50-day average, it has historically risen 16% the next month. It has also gained 100% the next six months and 274% after a year, according to the data.
You don't usually see this with stocks or ETFs. Because Bitcoin has mostly gone up over the years and has a lot of momentum trading behind it, overbought levels haven't been a problem for this space.
Bitcon's gains since mid-March, even as Russia's war in Ukraine dragged on, also helped it against gold, its traditional safe-haven rival, which traded sideways during the time, making it even more valuable.
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