Bitcoin is poised for further gains and may reach as high as $48,000 by the end of the year, according to a technical analysis conducted by one analyst.
Breaking Through Resistance Levels
As Bitcoin surged above $32,000 and briefly touched $35,000 on Tuesday, it marked a significant breakthrough by clearing a heavy overhead resistance level, explained Julius de Kempenaer, a senior technical analyst at StockCharts.com.
The Next Milestone: $47,000 to $48,000
De Kempenaer predicts that the next major resistance level for Bitcoin is between $47,000 and $48,000. He believes that the cryptocurrency will test this range and potentially reach those heights by the close of 2021.
Consistent Growth Expected
Analysts at crypto derivatives exchange Deribit share a similar sentiment, foreseeing continued upward movement for Bitcoin. They note that Bitcoin's consolidation between the $20,000 to $30,000 range over the past 18 months suggests the potential for substantial upward momentum upon breakout.
Increased Activity in the Crypto Market
The crypto market as a whole is experiencing heightened activity. According to analysts at Deribit, the 24-hour trading volume has increased by 97% in the past week, now standing at $82.5 billion.
Open Interest Reaches New Highs
Additionally, total open interest on Deribit is currently hovering around $21 billion, approaching an all-time high. Open interest reflects the total number of outstanding derivative contracts for an asset and is often indicative of market participation levels.
Bitcoin Dominance on the Rise
Bitcoin's dominance ratio, which measures its market capitalization in relation to the total crypto market, reached approximately 54% on Tuesday. This figure represents the highest level since April 2021. Bradley Duke, Chief Strategy Officer at ETC Group, suggests that the growing enthusiasm for Bitcoin indicates a potential resurgence in its popularity.
Bitcoin's upward trajectory is expected to continue, attracting the attention of investors and traders alike. With significant resistance levels being overcome, the path to reaching $48,000 by year end seems increasingly likely.
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