According to Bloomberg News, Bitcoin was seen climbing beyond the $41,000 mark, making an advance along with the equities following indications from China that it is about to loosen the monetary policy.
The surge of Bitcoin
The biggest digital currency surged as much as 0.6% to $41,500 Thursday, gaining for the second day. Co-founder of Fairlead Strategies LLC, Katie Stockton, stated that the technical indicators that she is following suggest that Bitcoin could manifest a short-term bounce registering a limit as high as $51,000, anticipating that it can break through the 200-day moving average, which is at $48,000.
Bitcoin has been sticking in approximately $35,000 to $45,000 in the current year. A breakout for a brief period in March to reach the 200-day moving average was followed by a 19% drop since there were concerns about tightening monetary policies, which led to the plunge in risk assets. During the same period correlation between the token with that of the larger stocks grew to a record high.
The tighter link related to stocks did wonders for crypto on Thursday, as the coins did the work of broadly tracking the advances in the Asian stock market. On Wednesday, the State Council of China said it is taking steps to extend financial support to the economy, especially those industries and business entities that were finding it difficult to survive the pandemic.
Bloomberg News reports that the struggles of Bitcoin have put the spotlight on altcoins like Solana, Cardano, and Avalanche, which have performed better than it of late. The second-biggest digital token, Ether, was up 24% in the last month, in comparison to Bitcoin’s surge of 7%.
According to the managing director and technical strategy head at Fundstrat, Mark Newton, Bitcoin appears to be attractive to buy dips after falling to a test. This approximate 3-month trend connected earlier lows since the beginning of January. He said that the token must bounce in the upcoming week, with the upside target being $43,750 to $44.200, and this looks like it is the first meaningful target upside.
However, Newton expressed a cautionary note about Bitcoin recovery’s sustainability. According to Newton, the recovery is perhaps short-lived.
If Bitcoin slides below $40,000, it would have to face the risk of sliding to a secondary support level close to the $27,200 mark, as per Stockton. Bitcoin has not traded to that low level since December 2020.
