Bitcoin is signaling defiantly optimistic signs of a breakout ahead, potentially towards new record highs. Positive economic indicators coupled with heightened institutional interest is propelling this momentum. The cryptocurrency recently broke out of a flag pattern, signaling a continuation of its upward trend that began in early April. Institutional investors have been watching these crucial price levels as Bitcoin continues through this bullish cycle.
Bitcoin's price has been hovering just below its record high in recent days, buoyed by positive economic data and strong investor risk appetite. At one point on Wednesday morning, the cryptocurrency hit a high of $110,400. That jump came after an inflation report showed consumer prices rising more slowly than anticipated last month. Though it dropped down to $108,800 recently during a U.S. stock market pullback, the long term direction for Bitcoin is still upward. Bitcoin last reached an all-time high of just under $112,000 on May 22.
Bitcoin has had a great run so far this year, up about 16% already, handily beating the biggest stock indexes. That boom is backed up by technical indicators, indicating a powerful bullish momentum surrounding the crypto market.
Technical Indicators Point to Further Gains
As far as technical outlook goes he Bitcoin is looking really good right now, with multiple indicators confirming the bullish narrative. Earlier this week, Bitcoin made an impressive breakthrough by breaking above the bullish flag. In technical analysis, this formation in a chart pattern often indicates that the bullish trend will persist. The breakout is a very bullish sign that Bitcoin is likely headed for even more upside in the short term.
Last month, Bitcoin’s 50-day moving average (MA) crossed above the 200-day MA, forming a bullish silvery golden cross signal. One would expect to see this very well known technical pattern before a major upward price breakout, which provides even more confidence to the bullish outlook.
The price has been ringing like a bell inside of a flag formation. This bullish chart formation indicates that Bitcoin’s uptrend from early April is set to continue. This extended consolidation period ultimately provided Bitcoin the momentum to launch its next move higher.
Key Price Levels to Watch
With Bitcoin now pushing toward new all-time highs, there are a few important levels that investors should keep a close eye on. First, watch that immediate ceiling of about $112k overhead. This level is especially important, as it will face a lot of public attention since it is closest to last month’s all-time high. A successful breach of this resistance would open the door for a rally back up to $137,000.
When profit taking/pullbacks occur, the $107,000 level needs to be watched carefully as an early line of support. In fact, a deeper retracement could see Bitcoin’s price head back toward the favoured $100,000 level. This level has acted as a major psychological support in the past.
Speculative investors should keep a sharp eye on these major overhead hazards on BTC’s chart near $112,000 and $137,000. Keeping an eye on other key support levels around $107,000 and $100,000, too, will be important.
Institutional Interest Surges
There is no doubt that institutional interest in Bitcoin is booming. We can see this in the massive surge in total assets under management in Bitcoin exchange-traded funds (ETFs). This month, assets in these ETFs shot up to $132 billion. That’s a huge jump from only $91 billion in early April! This surge indicates that institutional investors are increasingly recognizing Bitcoin as a legitimate asset class and incorporating it into their portfolios.
Institutional sentiment toward Bitcoin is driving unprecedented capital into the world’s largest digital currency. This spike is poised to pump up its value and fire up sustained development. When other institutions join and invest in Bitcoin, its market cap will increase. Increasing liquidity would help make the market more stable and less volatile.
