Momentum indicator points to an imminent Bitcoin breakout

A strong upward move could result from this week’s momentum indicator action, which is in line with behavior throughout 2021.

In one tweets On December 16, on-chain analyst Matthew Hyland drew attention by highlighting Bitcoin’s momentum indicator.

Momentum indicator suggests a possible big upward move

Although Bitcoin is still limited to below $ 50,000, it has broken out of an ongoing downtrend in the momentum indicator, which measures closing prices relative to recent closing prices.

Two such breakouts have occurred this year, and Bitcoin price continues to see significant price increases after each breakout.

“Two times before breaking a month-long downtrend this year, the next big move,” said Hyland.

Annotated Charts of BTC / USD vs. Momentum Indicator | Source: Matthew Hyland / Twitter

While this is not a guarantee of “just up” price movement, the momentum data combined with a large number of on-chain indicators are showing bullish signals this month – a sign of continuation.

Known for its very optimistic price forecasts, Hyland caused a stir last month when it forecast Bitcoin would hit $ 250,000 by January 2022, during stock-to-flow (S2F). , one of the most popular pricing models, has been invalidated.

https://twitter.com/Parabolic_Matt/status/1471223777790996486?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener
“The bitcoin bottom structure on RSI and momentum (daily time frame) looks very similar to what it was in September before the bullish reversal began.

• Momentum has broken out
• RSI needs to close above resistance to confirm breakout
• Bitcoin price is waiting for a breakout. “

In another analysis, Hyland notes that both the Momentum Indicator and the Relative Strength Index (RSI) of Bitcoin in the daily timeframe mimick the behavior of September, when the market first bottomed out when it hit an all-time high ( ATH) rose from $ 69,000.

Dollar loses strength after news from the Fed

Price movements in the spot market looked quieter on December 15, with Bitcoin price only being around $ 49,000 despite a significant decline in US dollar strength.

The US dollar currency index (DXY), which measures the strength of the dollar against a basket of trading partner currencies, reversed a bullish trend that lasted last week and saw a sharp decline in prices on December 1, data from TradingView shows .

DXY 1-day candlestick chart | Source: TradingView

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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