Bitcoin’s Surge Hits New Yearly Peak: Will $50,000 be the Next Milestone
[TL; DR]
In the second week of December the price of Bitcoin surpassed $44,400.
Some analysts believe that bitcoin may reach $50,000 in early 2024.
The RSI, SMA and Elliott Wave count show that bitcoin is still bullish.
Introduction
Overall, bitcoin has been bullish throughout 2023 as it topped $44,000 during the second week of December and has already recorded a 40% rally over its November value. During its price surge, the coin has broken several resistance levels and seems ready to continue with the trend. However, the market expects it to have another strong thrust towards $50,000.
This analysis looks at bitcoin’s possible price movements and assesses its potential to breach the $50,000 resistance level. We shall also uate the indication of key technical analysis indicators like the RSI.
Bitcoin Surpasses Key Resistance Levels
The Bitcoin price picked from the October low of around $30,000 to close November at around $38,000, its 19 recent month-high. The main causes of this price resurgence are changes in its fundamentals and the news of a potential spot bitcoin ETF approval in the United States.
It has been the confluence of various bullish factors and the approaching bitcoin halving that are driving its price up. The continued positive bitcoin news like El Salvador’s Freedom Visa Program has added more positive sentiment to the coin.
Due to these various factors, in late November the bitcoin price rose above its 50-day moving average and it has since then maintained an upwards momentum, creating hope that it may surpass the $50,000 mark in late December or early 2024.
On 5 December bitcoin reached a new yearly high of $44,490 after breaking several key resistance levels including $42,752.20, $42,911.27 and $43,051.70. In fact the $44,490 high exists in a Fibonacci resistance area.
In addition to entering the key Fib resistance zone in the past week, the relative strength indicator (RSI) showed that bitcoin has much bullish pressure. During the second week of December the weekly RSI rose above 50 and continued to increase, showing bullish momentum.
That type of RSI reading for bitcoin was last experienced in 2020 before its all-time-high of November 2021. Basically, market traders use the RSI indicator to identify the overbought and oversold conditions which help them make informed investment decisions.
If the RSI reading is above 50 and is rising it indicates that bulls are in control. On the other hand, when the RSI reading is below 50 and is falling it means the sellers are in control of the market.
During the same period bitcoin had risen above the 21-day simple moving average (SMA) as the uptrend continued. For some time, the bulls have been defending the 21-day SMA, thereby maintaining the upward price trend. However, if the bears would break the 21-day SMA the trend might come to an end. Currently, bitcoin is hovering below the $45,000 resistance level.
The Elliot wave also shows that bitcoin is in a strong bullish momentum. Technical analysts use the Elliot wave count to determine the asset’s long term price pattern as well as assess investor sentiment which assists in determining the market direction.
For instance, a technical analyst Bluntz Capital posted the following graph on X, showing bitcoin’s existing leg that extends from the $36,000 price point.
Elliot Wave for BTC Perpetual Contract - Bluntz Capital
Despite the above uptrend, Bluntz Capital has indicated a strong possibility of a pullback. He posted on X, “All I see is people taking profit and warning of impending 10-15% pullbacks. You’re not ready for how far this leg from 36k extends.”
Bitcoin Rally Potentially Targeting $50,000
The Elliott Wave (EW) count indicates that bitcoin is heading towards $50,000, as it is close to the top of wave three in a five-wave upward movement, as the next graph indicates.
BTC Price PredictionBTC/USDT TradingView
However, it is important to note that if bitcoin reverts and closes below $43,000 a correction may start. Other than that the BTC price may progress towards $50,000.
Also, TheBlock reports that in early 2024 investors may buy BTC for a price of $50,000 or more. Citing CryptoQuant, a data analytics firm, TheBlock says that the bitcoin price may range between $50,000 and $53,000 within the first quarter of 2024.
The cited analyst used various factors like bitcoin user activity, its market cap and transaction volumes to predict such a possibility. However, before any additional BTC price surge the coin may witness a correction.
In the meantime, the sell pressure may increase since bitcoin’s circulating supply that is in profit is approximately 88%. Such a rise in bearish pressure may result in a short-term bitcoin market correction.
At the time of writing traders can purchase bitcoin at $42,194 showing that the coin has already retraced from its recent high. The following graph shows bitcoin’s current trading zone.
Bitcoin Price Trend- Morpher
As the picture indicates, the 1 day chart shows that bitcoin still has much momentum. The Ichimoku kumo is green and the price is above it. Sadly, though, the bitcoin volume is very low as the MACD indicator shows.
Conclusion
In the second week of December the bitcoin price reached a 19 month high of $44,490. However, it has experienced what seems to be a temporary retracement since it is trading at $42,194. Still, the market remains optimistic that BTC will attain a price of between $50,000 and $53,000 during the first few months of 2024.
