Bitcoin surprised many investors with its aggressive momentum, which helped the digital currency to skyrocket in just a few days’ time. Bitcoin literally jumped from $19,500 to $27,000 in 7 days, representing a 37% price increase.
Bull run or bull trap?
Many people are still lost in 2023, thinking the bear market is ongoing. However, the prices say something different. Bitcoin has built a strong momentum since the beginning of this year, allowing the cryptocurrency to jump 74% from November’s bottom. It’s one of the best-performing assets historically, and even lately.
Related article: Credit Suisse gets fresh liquidity from SNB, but trust seems broken
While many thought Bitcoin is dead, the opposite is true. A divergence in the chart may have kickstarted the upward move. Moreover, the colossal weekly engulfing pattern confirms that digital gold is likely to go higher in the near future, however, it needs to be confirmed first.
That will happen when the weekly candle closes above the level of $25,315. Bitcoin getting above the 200-day moving average (EMA200) is also a great sign. As investors moved their capital from the risky banking sector to now “safe” crypto, Bitcoin was able to get above all the levels that held the downtrend.
Bitcoin weekly chart, source: tradingview.com, author’s analysis
Now as the $25,000 level is broken, investors wonder how high can it go. In the short term, Bitcoin is definitely overbought. However, that happens often when the bulls jump in the market aggressively. The bullish momentum has built up, and won’t probably stop for some time.
The upward move was probably also supported by the closure of large short positions, resulting in a massive short squeeze. Now as Bitcoin broke the important level at a third attempt, it could easily reach at least $30,000 in the next few weeks.
Bitcoin daily chart, source: tradingview.com, author’s analysis
The uptrend in the last week is truly exponential, which means investors can expect a sudden price crash of 5% to 10% any day. But that could actually be the opportunity to jump into the trend as it is poised to continue for some time.
Investors may anticipate a short term fluctuation or downtrend in the next few days to $24,000 or $25,000, but then Bitcoin is likely to continue to $30,000 in April or May.
Bitcoin 4-hour chart, source: tradingview.com, author’s analysis
Do not forget any unpredictable events like a crash of a significant crypto firm can send Bitcoin lower for some time, but it seems that the crypto winter is over.
The uptrend started with Bitcoin and could probably climax with altcoin season, which may be around the corner. However, that might be a warning signal of people getting optimistic all over again.