Bitcoin breaks 12-week downtrend, what’s next?

An 11% plaything to the upside connected Friday closed the time astatine $41,600. Although Saturday saw a tapering of activity, closing 0.6% down, Sunday and Monday saw a continuation of bullish form.

Crypto YouTuber Lark Davis noted the weekend’s terms enactment had breached the downtrend that has been successful unit since mid-November 2021. His tweet connected the substance posed whether this lawsuit is the commencement of a important rally.

Source: @TheCryptoLark connected Twitter.com

#bitcoin has been successful a downtrend since November, we person present breached retired of that trend.

Next stop? M O O N pic.twitter.com/jOjdV6LnIQ

— Lark Davis (@TheCryptoLark) February 7, 2022

Price analysis

Against a backdrop of looming tougher regularisation and fears of a rate rise sapping liquidity, crypto markets person had a jittery commencement to 2022. From highest to trough YTD, Bitcoin has suffered a 30% nonaccomplishment successful value.

The turning constituent came connected January 23, arsenic $BTC began grinding higher. However, tiny candle bodies suggested a chiseled deficiency of condemnation connected the portion of bulls.

It wasn’t until Friday conscionable gone that the bulls made a decisive move, spiking the terms from $37,300 to $41,800, closing the time somewhat down from the apical astatine $41,600.

On that event, sentiment per the Fear & Greed Index moved from a standing of 20, classed arsenic utmost fear, to 45 today, not acold from neutral territory.

The question is, is this the commencement of a large inclination reversal?

According to Davis‘ investigation of the Relative Strength Index (RSI), the signs are looking positive. He noted a interruption successful the RSI downtrend, with momentum rocketing overmuch higher implicit the weekend.

Davis points retired the past clip this happened, astir mid-July 2021, a 130% terms rally followed, including caller all-time highs.

“Are we going to spot a 130% terms rally now? That would beryllium awesome, who knows? But what is evident is that we person decidedly broke retired of this downtrend and that erstwhile we’ve had these RSI downtrends been breached retired of previously, they person travel close earlier a large terms rally.”

What’s adjacent for Bitcoin?

Although the technicals amusement enactment for a reversal, what astir connected the cardinal side?

Recently, pursuing El Salvador’s steps, determination is speech of another sovereign nation besides legislating for Bitcoin arsenic ineligible tender.

While there’s nary further quality connected that front, rumors suggest it volition beryllium different Latin American country next. Panama, Paraguay, and Guatemala are names being bandied about, portion Argentina cannot beryllium discounted either.

However, retired of leftfield, determination is expanding chatter astir a state, successful the United States, breaking normal besides to walk Bitcoin arsenic ineligible tender.

Host of the Smart People Sh*t podcast, Dennis Porter, told his 60,000 Twitter followers that Bitcoin volition deed $100,000 erstwhile a authorities announces $BTC arsenic ineligible tender. Porter past says much states volition follow, by which clip the 3rd is announced Bitcoin volition beryllium astatine $1,000,000.

While $100,000 seems somewhat achievable, $1,000,000, astatine slightest from our existent basal point, mightiness beryllium a measurement excessively far.