Momentum is the dominant feature of markets this year and nothing has more momentum than bitcoin right now. After a 10-day break as it consolidated around $52,000, bitcoin has broken out in a big way.
It’s up $3400 today, or 6.7%, to $54,450. That’s the highest since December 2021.
Looking at the weekly chart, the breakout also clears some minor resistance at $52,000 and suddenly, not much is standing in the way of a return to the record highs near $69,000.
Bitcoin weekly chart
Bitcoin bulls are optimistic that the looming halvening of mining supply, which is projected in late April, will tighten the market further. Oftentimes, speculators front-run moves, as they did on the ETF launch. A sell-the-fact trade on that was the right one as prices fell 20% before stabilizing and then quickly rebounding.
Right now, easy inflows into ETFs are helping to fuel the run-up as momentum trades dominate. The risk is that momentum runs both ways and we will see rapid declines in the future. That said, for now we’ve had a decent consolidation and the upside breakout will likely attract more buyers as the $60K range becomes visible.