Bitcoin could be on the heels of "a massive rally" as the weekly chart offers a unique sign of strength. A recent analysis of the cryptocurrency space by several prominent names suggests that it is time to abandon the idea of a bear market.
Despite talk of a new macro price for BTC, perhaps at the $12,000 level, the new outlook calls for a rethink. Whether due to macroeconomic factors or simple bitcoin price cycles, there are three new reasons to be optimistic about bitcoin at its current state near a two-year low.
The BTC could reach 110,000
A stock market recovery could boost the BTC price to $110,000. The first is a theory that assumes a macroeconomic market catalyst, put forward by analyst Henrik Zeberg.
In a Nov. 24 tweet, Zeberg stated that bitcoin has always behaved like other risk assets, but notably "not like gold." If the fall of the FTX weakens the correlation between BTC and equities, there is no reason to give up on the idea that it will come back.
For Zeberg, a rising tide lifts all boats and a possible rally in the risk asset camp could push the BTC/USD pair above $100,000.
"Bitcoin moves as a risk asset (not like gold!). If the SPX explodes higher from the blow-off top to the 5700 - 6000 target range, Bitcoin should rise to $90,000 - $110,000." He wrote.
Bullish divergence indicator reflects March 2020.
Returning to trends focused on cryptocurrencies, on-balance volume (OBV) is an indicator that gives a clue of a possible bull market ahead.
According to popular trader Alan Tardigrade, now is a good time to be cautious, as the weekly BTC/USD chart shows 20 weeks of bullish divergence.
"This shows that the downward trend is losing momentum," read the comments section of a Twitter message
An upward move would correspond with Bitcoin's behavior after the COVID-19 stock market crash in March 2020.
The OBV acts as a cumulative measure of buying and selling pressure by keeping a continuous record of volume over a period of time. It is similar to a cumulative volume delta, but includes more than just buy and sell transactions.
Bullish RSI Divergence Seen in Bitcoin
The OBV is not the only bullish divergence causing a stir in bitcoin analyst circles. For bitcoin trader and technical analyst Mags, this phenomenon, the first in bitcoin history, is an event to watch out for in the future.
Looking again at the weekly chart, Mags noted that the relative strength index (RSI) of the BTC/USD pair is now printing a bullish divergence in the weekly trend that has never been seen before, even at previous bear market lows.
"Each BTC bull market peak has produced a bearish divergence in the RSI, followed by a bear market correction," he explained.
This is the first time BTC has printed a bullish divergence in a week. It is the first time in a week that we see a bullish BULL. Something never seen before.