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Bitcoin (BTC) has finally crossed the $45,000 mark for the first time since mid-January, leading to a surge of optimism among investors. Some traders may even be setting their sights on a potential rise to $50,000.
Expert Warns of Bitcoin Volatility
Dan McDermitt, the founder and CEO of The Chart Guys, discussed the implications of this rally with Scott Melker, presenting an optimistic outlook for investors showing a bullish trend in the market. McDermitt noted that prices have been moving sideways on the daily chart for about two weeks. The expert also pointed out that this period of stability, defined as the narrowest range observed in months, signals an impending breakout, adding:
Whether bull or bear, we know a breakout is approaching in this range, and it will be accompanied by volume and volatility.
McDermitt explained that while a 10% follow-through on a bullish breakout may not be as common as in the past, the strategy of investing at such moments remains critical, emphasizing:
If I’m going to take a bullish break, it has to be a real tight, range-breaking bull like this.
Current Data on Bitcoin
Bitcoin may not have immediately surpassed its recent highest levels, but McDermitt claims that the market will likely seek a higher weekly low than the last low of $38,500. According to McDermitt, the ongoing question for investors is whether the market will continue to see larger bullish volumes or consolidate until February. The analyst believes that the next week to week and a half will be very important in determining the likelihood of each scenario.
The Chart Guy highlighted the importance of the 12-day exponential moving average (EMA) as a fundamental market indicator. According to him, as long as the bulls continue to maintain this level every time it is tested, the market will remain stable. McDermitt also recognized the importance of monitoring trading volume to assess market probabilities, especially in the context of recent activities on Coinbase and exchange-traded funds (ETFs), drawing more attention to market volume trends.
