The king of cryptocurrencies has been continuing its upward movement by making higher lows for weeks, and optimism prevails. The prevailing view that the ETF approval is almost certain has significantly increased investors‘ risk appetite. However, investors who have been in loss for over a year in altcoins are proceeding cautiously and also selling their profits. So, will BTC reach $40,000 this week?
The cumulative value of cryptocurrencies (TOTALCAP) has been making altcoin investors smile with rising candles for four weeks. The flat resistance area at $1.25 that has been stagnant since June 2022 was finally decisively broken. We saw that the cumulative value surpassed the $1.4 trillion threshold at the peak of last week. After this exciting peak, there was a slight pullback due to profit-taking.
The RSI is positive and the overall demand continues to remain strong. Previously, the RSI had made a corrective move before experiencing a 670% increase beyond 70 in August 2020. The current outlook indicates the continuation of the rise in the cumulative value of cryptocurrencies. The first major resistance is located in the $2.15 trillion region.
If the cumulative value undergoes a correction similar to that of 2020, the $1.25 horizontal area can be tested.
We will see so many important developments this week that even expectations about next year’s interest rate path can change. There is a full month until the December interest rate decision, and the current view now says that the interest ceiling has been reached. Optimism about inflation is strong, supported by the recent drop in oil prices. We will follow the statements of Fed members this week depending on the upcoming data on reasonable wage increases.
Similar to the cumulative value graph of cryptocurrencies, BTC also experienced a rapid increase. After five weeks of rising candles, the $38,000 level was tested. Even if the price did not surpass $37,972, we have in mind that critical levels were surpassed even after the fourth attempt in previous resistance tests. The weekly RSI is in an upward trend and has surpassed the 70 level.
In the past, when this level was surpassed in the BTC chart, a rally period of 560% had started. In the current outlook, if things go well, $40,000 seems like a reasonable target for this week. On the other hand, the next strong resistance is at $47,500.