A popular analyst says that the bull case for Bitcoin (BTC) is gaining steam amid strong price action, and that crypto is becoming “serious money” following recent geopolitical developments.
In the latest TechnicalRoundup newsletter, the pseudonymous analyst known as Cred says that Bitcoin’s reclaim of the $40,000 level bodes well for the top crypto by market cap’s technical market structure.
“As for technicals, the market is approaching multi-timeframe resistance in the mid-$40000 area. $46000-$47000 is a decent weekly line in the sand. Moving into it, there are some positive signs. Two in particular. First, the move into resistance is following a higher low. Second, this is the third test of that resistance in quite a short period of time. In general, the more a resistance is tested from the same direction, the weaker it becomes.”
Cred says that Bitcoin‘s recent spike to the $45,000 area, one of the biggest daily gains in months, suggests that resistance below the $50,000 is getting weaker after multiple retests.
“Some signs that resistance is getting weaker. Momentum/more sustainable trend triggers above $47000 on a higher time frame basis. Pullbacks that aren’t shallow (much below $40000) are probably bearish.”
The crypto analyst adds that geopolitical developments in Eastern Europe are giving digital assets an opportunity to show off their use case. According to Cred, crypto is officially “serious money” now but also warns that increased attention and scrutiny on the space could lead to more regulation.
“First, crypto is undeniably serious money now. If you wanted adoption, beyond a couple of U.S. institutions buying it for their balance sheets, this is what it looks like. Welcome to the big leagues.
Second, this will likely accelerate the regulatory timeline. Just like mandatory (base level) KYC (know your customer) became industry-standard virtually overnight, it’s likely that we see a move towards centralized exchange withdrawals being restricted to KYC’ed and whitelisted wallets in the near distant future. The premise that individuals are using crypto to circumvent sanctions will not be taken lightly, in our view.
Last, this geopolitical tango is bullish and bearish. Or, at least, a double-edged sword. Ukraine is accepting crypto donations to fight a defensive war. This is seen as a net positive. At the same time, there is speculation that Russian oligarchs (and perhaps organs of the state itself) could use crypto to circumvent sanctions. This is seen as a net negative. Does one ‘cancel out’ the other?”
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Featured Image: Shutterstock/Natalia Siiatovskaia/jdrv_art
