Bitcoin is flashing technical signals that point to a strong jump in price from current levels as soon as next week if trading volume continues to pick up, digital asset broker GlobalBlock said in a note on Monday.
The price of the world’s largest cryptocurrency by market capitalization could break out from its current sideways trading range and jump to $42,000 in the next couple of weeks, said Marcus Sotiriou, sales trader at GlobalBlock. That would be 26% higher than bitcoin’s price of $33,171 seen around midday on Monday.
Underpinning this prediction is the Bollinger Bands indicator, which defines an upper and a lower range that forecasts volatility when constricted. The indicator has been at its tightest spread since September 2020.
That month, Sotiriou said, was when bitcoin began its run-up from $10,000 to its all-time high of nearly $65,000 in April of this year.
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Bitcoin has been trading at $29,000-$42,000 since a broader cryptocurrency crash in May. Unless the price breaks out of this range, it technically remains in a downtrend, Sotiriou added.
However, he noted that bitcoin’s price continues to hold the 50-week exponential moving average as support. It also looks to break out of a downtrend on the daily Relative Strength Index, which started in January 2021.
“Because the [Relative Strength Index] is trending up whilst price is trending down, bearish momentum is dying out,” he said.
Bitcoin was last trading 2.43% lower, at $33,072 as of 3:23 p.m. ET on Monday.