Bitcoin surpassed $41,000, rising alongside equities after China indicated it is about to ease monetary policy.
On Thursday, the largest cryptocurrency rose as much as 0.6 percent to $41,500, gaining for the second day in a row. Katie Stockton, the co-founder of Fairlead Strategies LLC, believes Bitcoin is due for a short-term bounce to as high as $51,000, assuming it can break through its 200-day moving average, which is just above $48,000.
“We anticipate an oversold bounce and a higher low,” Stockton predicted.
This year, Bitcoin has largely remained in the $35,000 to $45,000 range. A brief breakout to the 200-day moving average in late March was followed by a drop of up to 19% as fears of monetary tightening triggered declines across risk assets. During that time, the token’s correlation with large technology stocks reached an all-time high.
The stronger link with stocks aided crypto on Thursday, as coins broadly tracked gains in Asian stock markets. China’s State Council announced Wednesday that it will “increase financial support to the real economy, particularly industries and small businesses hard hit by the pandemic.”
“After falling to test a nearly three-month trend connecting prior lows since early January,” said Mark Newton, managing director and head of technical strategy at Fundstrat. The token “should bounce over the next week, with upside targets ranging from $43,750 to $44,200, with $44,200 appearing to be the first meaningful upside target,” he added.
Bitcoin’s struggles have drawn attention to so-called altcoins such as Cardano, Avalanche, and Solana, which have recently outperformed it. Even the second-largest token, Ether, is up 24 percent in the last month, compared to Bitcoin’s 7 percent gain.
Both Stockton and Newton expressed concern about the long-term viability of Bitcoin’s recovery. Newton predicted that the rebound would be short-lived and that “movement back above $48,248 would be required to expect the start of a new multi-week or multi-month rally had begun.”
If Bitcoin falls below $40,000 again, it risks falling to a “secondary support” level of around $27,200. Stockton believes. Since December 2020, Bitcoin has not traded at that low.
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