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The recent surge of the largest cryptocurrency Bitcoin (BTC) to levels not seen in 26 months, exceeding $52,000, has sparked debates among analysts about the sustainability of the upward momentum. While some analysts expect this rise to be followed by a correction, others believe the increase will continue.
Swissblock Analysts Indicate Bitcoin May Signal a Correction
Swissblock analysts warn that the momentum of Bitcoin, which has paused at the key resistance level of $52,000 after a rapid 33% increase in just a few weeks, could indicate “a pullback” as they consider the rise potentially unsustainable.
Bitcoin’s latest rally has outperformed the broader market with a 10% increase in one week. This rise was accompanied by significant inflows into US spot bitcoin exchange-traded funds (ETFs), including BlackRock’s IBIT, which accumulated over 28,000 BTC this week. However, Swissblock analysts see the $52,000 level, which previously capped prices in September and December 2021, as a significant resistance zone in long-term charts. Now, this level poses a meaningful barrier to the continuation of Bitcoin’s upward momentum.
Despite the potential for a short-term correction, Swissblock analysts added that any pullback could be used as a buying opportunity, particularly if Bitcoin manages to maintain support near the $47,500 level. The report advises investors to view any dips as potential entry points for long-term positions.
10x Research Analyst Expects $57,500 Target
Despite warnings of a possible pullback, some analysts continue to be optimistic about Bitcoin’s future trajectory. 10x Research has set a price target of $57,500 for the next rise, suggesting that the uptrend could continue beyond the current resistance level.
10x Research analyst Markus Thielen maintains a bullish outlook on the largest cryptocurrency, citing strong liquidity and increasing demand for Bitcoin futures. Thielen argues that Bitcoin could target a price of $57,500 and points to the performance in periods before previous block reward halvings as a positive indicator for further upside potential.
Institutional cryptocurrency exchange FalconX also observed “extraordinary” trading volumes supporting the uptrend in early 2024, reminiscent of patterns seen during the March 2023 regional banking crisis. While historically low volumes following price increases have indicated false breakouts in crypto, FalconX analysts noted that liquidity conditions surrounding the January rally have generally remained strong.
