Bitcoin price rose to a three-week high but it’s too early to say whether this is a sustained rally
Bitcoin price is holding support above $40,000 as short-term momentum signals improve. For now, pullbacks appear to be limited, which means buyers could remain active toward the $46,000-$50,000 resistance zone. At the time of writing, BTC is changing hands at $42,538.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price rises above $42,000; resistance at $46,000 – $50,000
Bitcoin rose to a three-week high as cryptocurrencies moved with major stock market indices. It rose to $42,673 as of press time, up 4.1% in the past 24 hours.
The price of the largest cryptocurrency by market value touched $43,337, the highest point since March 3. Bitcoin trading volume has been around 30,000 BTC in the past 24 hours, a low point compared to the past month.
As BTC soars to $42,000, more than 15,000 BTC in outflows from exchanges were spotted yesterday, the largest since Jan 29. Crypto analysts often see Bitcoin outflows from exchanges as a sign that traders aren’t looking for a quick sale – so they might be moving the coins into long-term custody or storage options. An elevated rate outflow is typically seen as bullish.
The Bitcoin market took a hit briefly on Monday after Federal Reserve Chair Jerome Powell signaled in a speech that the U.S. central bank might raise the benchmark interest rate by half a percentage point at certain meetings over the rest of the year.
A decisive breakout above $46,000 is needed to shift the four-month-long downtrend. Typically, price rallies stall after retracing 50% of the prior down move, similar to what occurred in September 2021 around the $50,000 price level.
BTC/USD 1-day chart | Source: TradingView
The relative strength index (RSI) on the daily chart remains in the bullish territory (above 50), indicating renewed buying activity. On the weekly chart, momentum indicators are on the verge of turning positive for the first time since August, which preceded a strong price rally. Still, a bearish set-up remains on the monthly chart, which means the upside could be limited.
However, the market bounced back aggressively Tuesday despite the Fed’s hawkish attitude. Before announcing a more aggressive Fed action, the Federal Open Market Committee (FOMC) announced a 0.25 percentage point rate hike last Wednesday.
Elsewhere in cryptocurrency markets, Ether (ETH) was up 2.14% over the past 24 hours, and Solana (SOL) was up 4.35%.
“This past week has been a sea of green for crypto after the FOMC announced the rate hike everyone expected. Prices are still pumping in tandem with equities, but there are signs of less correlation. Ethereum has seen a big surge in social discourse”, Santiment stated.
Among the top 10 coins by market value, all coins were up 24 hours ago. The overall cryptocurrency market cap now stands at $1.779 trillion, and Bitcoin’s dominance rate is 42.1%.
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