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Bitcoin's break out of a protracted consolidation phase has prompted many to forecast an extended rally in BTC.
Bitcoin officially went beyond the $47,000 barrier yesterday, its highest level since early January, marking a break out of the two-month triangle pattern formed by the February 10 and February 2 highs. March is the wettest month, with the lowest values occurring on January 25 and February 24.
Daniel Kukan, a professional cryptocurrency trader with Switzerland-based Crypto Finance AG, stated in a Telegram chat: "The triangle breakout has initiated an upswing approaching resistance." 53,000 US dollars".
When bulls and bears move the price sideways, a triangle pattern arises. This pattern shows a steady shrinking of a trading range. Thus, traders and chartists regard a breakout of a triangle formation as a signal that a fresh rally or dip in price is about to begin.
Richard Perry, a market analyst, tweeted:
"Bitcoin made a bullish breakthrough choice yesterday. A significant base pattern has been constructed above $45,855. This means that BTC may soon attempt the $52,000 resistance level and the predicted objective of $57,400."
Fundamental and macro strategists sometimes criticize technical analysis as untrustworthy due to the frequent failure of chart patterns and indicators. Nonetheless, technical analysis is difficult to ignore. With such a large number of individuals trusting these research, mutations or occurrences frequently prove to be quite accurate predictions.
According to the chart above, a crossing of the 50-day and 100-day SMAs is possible shortly, supporting the present bullish trend.
When the short-term moving average crosses above the long-term moving average, showing positive momentum, this is a bullish indicator. Bitcoin rose from $44,000 to $52,000 in the weeks following the formation of a bullish cross between the 50- and 100-day SMAs on August 19, last year.
"A break over $45,000 adds extra confidence that a trend reversal is happening, but our inclination is to be cautious," Lennard Neo, head of research at Stack Funds, told CoinDesk through WhatsApp. as the move was fueled in part by a robust stock market."
In other words, cryptocurrencies have not yet broken free from stocks and traditional finance's risk aversion.
Kukan of Crypto Finance AG, on the other hand, believes that the optimistic view would be discredited if the cryptocurrency falls below the $43,000 support level.
Bitcoin is presently trading at $47,440, an increase of almost 12% in the last week.
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