Bitcoin, the leading cryptocurrency asset, appears poised for a potential upward trend once again. Recent changes surrounding Coinbase Premium hint at the likelihood of a short-term rally, indicating an optimistic outlook for BTC in the weeks to come.
Short-Term Rally For Bitcoin On The Horizon
The Coinbase Premium, an important metric that assesses BTC’s price variations on the Coinbase exchange versus other cryptocurrency platforms, is signaling a potentially positive shift for Bitcoin’s value shortly. This suggests that institutional investors in the United States are intensely buying the crypto asset, reflecting growing demand and bullish sentiments within the US market, which could lead to a short-term rise for BTC as these investors aim to benefit from its strengthening momentum.
Yonsei Dent, a market analyst and enthusiast, discussed these findings in a recent quicktake post on the prominent on-chain analytics platform, CryptoQuant. The analyst foresees a potential rally following a review of the Coinbase Premium Index on the hourly basis and utilizing the 24-hour and weekly moving averages to gauge short-term activity.
Through meticulous analysis, Dent found that a decisive break of the daily moving average above the weekly moving average often correlates with significant impacts on price movements.
Referring to historical Bitcoin patterns, the expert noted that previous attempts of BTC forming a golden cross were often followed by short-term price increases. This phenomenon occurs due to the substantial price shifts that typically happen right after the 1-day moving average crosses above the weekly moving average.
Additionally, the current daily moving average has momentarily surpassed the weekly moving average, with prices currently at the $66,400 level, a zone where support for September’s peak may be anticipated, as illustrated by the black arrow on the chart.
Consequently, Yonsei Dent expects the market to establish a clearly defined upward trend as long as the series of higher highs and higher lows continues, which has been progressively increasing since August.
A Possible Price Correction For BTC
While Coinbase Premium may signal an upcoming short-term rally, Kyle Doops, a technical analyst and host of the Crypto Banter show, has highlighted a potential price correction for the flagship digital asset in the near future. Kyle Doops’s pessimistic outlook stems from an assessment of Bitcoin‘s quarterly performance by comparing its market cap with its realized cap, which unveiled significant trends for the market.
Following a thorough examination of this metric, the analyst cautioned about possible pressures leading to selling and bearish signs if the growth of the market cap exceeds the realized cap. Nonetheless, a stable realized cap during downturns could suggest market bottoms. “With patterns reminiscent of 2021, a price correction may be forthcoming,” he remarked.
Featured image from Unsplash, chart from Tradingview.com
