Bitcoin May Head Toward $56,000 After Consolidation: Analyst

Bitcoin established a yearly-high price last Thursday when it rose to $25,270. The latest rally reflects a surge of 18.25% from the local low of $21,376 set after an initial rally in January 2023.

At $25,270, Bitcoin reached its highest price in the past eight months. In a market rally that took many by surprise, Bitcoin added $1,820 in a single day, making it the biggest green day since September 9, 2022, when Bitcoin gained $2,047.

According to analysts, rising dollar value and declining inflation are behind the recent price surge. On the contrary, on-chain data suggests that the rally can be the aftermath of significant inflow from unidentified sources tracked back to February 10, 2023. Since then, nearly $1.6 billion in institutional funds have poured into the Bitcoin market, most of which were from the Circle-issued stablecoin, USDC.

From a technical perspective, the Bitcoin surge comes a few days after Bitcoin hits the weekly death cross. This occurs when a short-term moving average (MA), usually the 50-day MA crosses below its long-term moving average, usually the 200-day MA. Although the pattern appears bearish, it has been followed by short-term above average returns in recent years.

BTC/USD Chart Source: TradingView

Bitcoin made its way upward after consolidating for almost two weeks. It broke through the recently established resistance at $24,258, having rallied to this point in January 2023.

According to William Noble, director of research at Emerging Assets Group and former analyst at Goldman Sachs and Morgan Stanley, Bitcoin may head towards the $56,000 region.

The analyst who correctly predicted Bitcoin’s surge from $20,000 to $40,000 in late 2020 said that the flagship cryptocurrency may move from consolidation to another parabolic move back to the predicted price level.

Disclaimer: The views and opinions, as well as all the information shared in this price prediction, are published in good faith. Readers must do their research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be held liable for any direct or indirect damage or loss.