2021-1-10 03:04 |
Bitcoin has been on a tear throughout the past few weeks, with its price action heating up as bulls try to flip $40,000 into a support level If the crypto continues holding above this previous resistance, it could allow for significantly further upside in the days and weeks ahead One analyst explained that although it seems like Bitcoin’s rally may be over-extended, its risk-adjusted returns are on-par with how where they are historically As such, there’s a strong possibility that the crypto could see significantly further upside before it reaches a point of exhaustion Once its returns are drastically higher than its risk-adjusted returns have been historically, then the crypto may be at risk of posting a 2017-style blowoff top
Bitcoin and the entire crypto market are currently in the midst of a parabolic bull market. Although not as drastic as that seen throughout late-2017, it has allowed Bitcoin to double its previous highs.
This rally shows no signs of slowing down as Bitcoin moves to flip $40,000 into a support level. A continued bout of trading above this level could lead to further upside in the days ahead.
One on-chain analyst stated that although the benchmark crypto is seeing some intense momentum, its rally may be far from being over-heated.
Bitcoin Holds Above $40,000 as Uptrend ContinuesAt the time of writing, Bitcoin is trading down marginally at its current price of $40,300. This is around where it has been consolidating throughout the past few days.
It has made a few attempts to rally into the mid-$40,000 region, but each one has been met with serious selling pressure that has slowed its ascent.
Its reaction to $50,000 – should this level be tested – will likely offer significant insights into just how long-lasting this parabolic ascent will be.
On-Chain Analyst: BTC Risk-Adjusted Returns Indicate Upside is ImminentOne analyst explained in a recent tweet that he expects Bitcoin’s risk-adjusted returns to extend far past where they currently are before the crypto forms a peak.
He seems to believe that, until these risk-adjusted returns become exorbitantly higher than usual, it has room to rally.
“If you think you’re late to the Bitcoin party, think again. Bitcoin’s risk adjusted returns has been at the same high levels for 6 years running. Clearly outperforming every other asset class since its inception.”
Image Courtesy of Willy Woo.Where the entire market trends in the mid-term should depend largely on whether or not Bitcoin can continue holding above $40,000, as a prolonged dip below this level could lead to serious downside.
Featured image from Unsplash. Charts from TradingView.Similar to Notcoin - Blum - Airdrops In 2024
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