Bitcoin Is The King Right Now

Bitcoin broke above the $30k resistance yesterday. Thus, the Bitcoin price returned to its last stop before the bear market. Last year, Bitcoin bulls heroically defended the $30k resistance throughout May. However, the problems experienced by crypto finance institutions such as Celsius, Voyager, and 3Arrows caused the price to drop rapidly to $20k.

Are people still waiting to buy Bitcoin in the range of 10k-14k dollars? Perma bears, who did not like the price of 16k Bitcoin, missed the opportunity of approximately two times the return that took place in 4 months.

Bitcoin Technical Analysis

The overwhelming majority of technical analysis indicators point to the upside. Essential moving averages, especially 200 days, on 4-hour, daily, and weekly charts give a "buy" signal. The weekly RSI is above 50, indicating an uptrend since Jan 16.

In the chart below, we see Bitcoin's last 1-year price action.

With the new year, it is seen that the rise that started from the 16k level continues. Bitcoin's movements are reminiscent of idealized examples in technical analysis textbooks. Last fall, when Bitcoin did not fall below the 16k resistance for about three months, a breakout occurred towards 20k. With high momentum, the price passed $20k, a critical resistance point, and increased to $25k. Later, the price retraced to the 20k level. 20k acted as resistance this time, and a new rally started. The fact that there was no significant pullback in the price after the rapid rise from 20k to 28k heralded the last movement yesterday. Again, the ideal bullish flag, which we can only see in books, resulted in a new surge. Currently, the price is hovering above the 30k resistance. Will Bitcoin be able to pass the 30k-32k band permanently? The answer to this question relates to the actions the FED will take in the coming period. If the 30k-32k band is passed, the next target will be $40k.

Macroeconomic Outlook

On the central banks front, the outlook has become quite clear lately. To start with the Fed leading the rate hikes: NewYork central bank governor Williams said yesterday that "a final rate hike would be reasonable." Likewise, futures pricing shows that the FED will increase the interest rate by 25 basis points in May. William's words indicate that the increase to May 5 may be the last.

The next meeting of the European central bank is on May 4. A 25 basis point rate hike is expected at this meeting for the "last time." China, the world's second-largest economy, has no problem with inflation. Therefore, the People's Bank of China has been following an expansionary monetary policy for a while. Central banks of countries such as England, Brazil, Canada, and Australia did not increase interest rates last month.

What is more important than whether the interest rates have increased is that the uncertainty in the market has disappeared. That's why the prices are also rising in the stock markets.

Bitcoin vs Altcoins

Although Bitcoin's price outlook is strong, we do not see a similar situation in altcoins. Bitcoin almost sucks liquidity from the market. That's why altcoins have been following a sideways trend for a month. It is not the first time that Bitcoin has led the rise. In 2020, Bitcoin first rose, and after the confidence in the market strengthened, altcoins followed Bitcoin. Compared to 2020, the use of altcoins is more common. Therefore, altcoins can close the gap in less than four months.

Conclusion

The Hive price has been hovering around 40 cents since February. Other altcoin prices are similarly flat. As we can see in the chart below, Bitcoin's dominance has been rising regularly since December.

Bitcoin will likely lead the rise for a while. After the confidence in the market is well consolidated, it will be the turn of the altcoins.

Thank you for reading.

Cover Image Source: Midjourney App

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