A rare buy signal has been printed on the monthly chart of bitcoin (btc), fueling the ongoing debate over btc's price trajectory in the coming weeks. This comes amid recent concerns about the stability of the traditional financial system.
A rare print of bitcoin buying signals
According to an X cryptanalyst, the ADX/DI indicator formed a bullish crossover on the monthly chart for the first time in eight years. The trend and momentum tracking tool is mainly used due to its ability to identify trend strength and possible reversals.
Sharing a chart, the analyst noted that the current formation is “eerily similar” in structure to when the same pattern printed in 2016. Following this pattern in 2016, bitcoin prices surged the following year, sparked by the euphoria of the ICO. In December 2017, btc prices surpassed $20,000, recovering from less than $500 the previous year when the ADX/DI indicator flashed the buy signal.
Still, it remains to be seen whether this signal precedes a bitcoin advance. Technical indicators like ADX/DI tend to lag because they use parameters derived from price or volume.
Furthermore, as past price developments show, historical performance does not guarantee future results. bitcoin and cryptocurrencies are increasingly intertwined with the global economy.
btc prices may be affected by macroeconomic risks and regulatory decisions such as the Federal Reserve's recent decision to maintain interest rates.
Cracks in the US banking system, btc at $1 million?
However, the rare buy signal comes amid growing anxieties about the health of the US banking system. Recent events, including a sudden drop in NYCB stock prices, have fueled speculation about possible vulnerabilities.
In light of these concerns, Arthur Hayes, former co-founder of BitMEX, a crypto derivatives exchange, remains optimistic about bitcoin's prospects.
Depending on the investor perspective, there is a chance that new cracks in the US banking system could trigger massive demand for bitcoin as the US Federal Reserve intervenes, either through policy or by printing more money. . If this happens, Hayes projects that bitcoin will reach $1 million, multiples higher than $69,000, the highs recorded in the second half of 2021.
bitcoin is under pressure, as the daily chart shows. The currency is moving below $43,000 and remains under pressure.
Key support levels remain at $40,000 and $39,500. Conversely, any break above the $45,000 and $50,000 resistance lines can anchor the next wave higher, lifting the coin towards $70,000 or higher.
Featured image from Canva, TradingView chart
