BTC Rises Above Key Short-Term Resistance, Earnings of $50,000?

BTC Rises Above Key Short-Term Resistance, Earnings of $50,000?

Bitcoin has outperformed global stocks even in a low-risk environment as investors waited to see whether support at $40,000 would hold. Today's strong rally could be the start of the next uptrend for the primary cryptocurrency, after a month-long convulsion filled with liquidations and FUD, mostly from China.

As we reported this week, the 4-hour chart showed a flattening of the short-term moving averages, a sign that consolidation is progressing and potentially setting up a breakout attempt.

BTC continued to make higher lows and started testing the rising trendline at $44,000. Within hours, BTC pushed higher and tested the next key resistance levels at $44.3K and $45.1K.

Chart according to TradingView

BTC soared as shorts were squeezed out of their positions as a staggering 539 BTC shorts were liquidated in just a minute, taking BTC to $47,000. As of now, BTC's rally hit an intraday high above $48,000 and formed a higher high, further suggesting thatWave 2Correction probably completed.

Chart from CryptoQuant

If the higher low was actually at $40.7kWave 2, recent price action above $45.2k suggests BTC is enteringWave 3, which is the most significant upward move. Given that these Elliot waves are smaller compared to the larger wave numbers, this upward move could be the start of a strong bullish impulse, potentially sending BTC back into all-time high territory – amid the $65,000 region.

Chart according to TradingView

It is important to wait for the daily close (midnight UTC) to see if Bitcoin price can maintain gains. It is important to close above $45.2K to form a higher high. At the time of writing, BTC is also intraday above the 200-day moving average and 21-week EMA, two critical levels in determining the continuation of the bull market.

Reclaiming the 200-day moving average and 21-week EMA on a weekly closing basis is a very bullish signal.

On-chain was bullish at $40.7k

BTC on-chain metrics continued to show a strong bullish trend as FUD and risk-off rocked the market. Persistent liquidation events and FUD, the long-term holders and miners, have continued to accumulate throughout May's 55% decline. This behavior is consistent with previous Bitcoin bull markets, particularly the 2013 bull market, where long-term holders and miners continued to accumulate.

Chart from CryptoQuant

Unlike bear markets where long-term holders and miners distribute aggressively following parabolic blow-off tops and bull traps, this year's 55% crash in May did not result in further distribution by these cohorts. This trend clearly refutes the bear thesis as all bear markets saw an aggressive distribution of long-term holders and miners.

In recent days, foreign exchange spot reserves have continued to trend lower despite global markets selling off and the dollar recovering. CryptoQuant's UTXO age distribution showed that younger coins continued to sell while the older coins accumulated. Spot exchanges fell by more than 15,000 BTC during the 3-week pullback, a strong signal of accumulation.

Chart from CryptoQuant

Incoming bullish move?

With short-term technicals showing significant improvement, a firmly bullish on-chain trend, and divergence from global equities, BTC appears well-positioned for a significant upside if we continue to see significant accumulation and price tracking to the upside.

For now, the bulls have regained control. The weekly close will further confirm the recent upward move. All eyes will be on $45.2k to confirm a higher high.

.