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The rally has reinforced Bitcoin’s gains above $40,000, suggesting a new target sits above the $43,000 resistance level.
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Bitcoin’s price may track movements in the S&P 500, as cryptocurrencies and equities remain strongly correlated.
Bitcoin’s recovery resumed on Monday after a weekend pause, reclaiming territory above $40,000 as bulls pushed back against resistance above $43,000.
Those gains followed a week in which U.S. equities also advanced—the S&P 500 posted its best week year-to-date—even as central banks maintained a hawkish stance amid rising inflation. Positive headlines from automaker Tesla, which disclosed on Monday that it holds nearly $2 billion worth of Bitcoin, may also have supported the cryptocurrency’s advance.
So, what are analysts saying about Bitcoin’s short-term outlook?
Analysts on Bitcoin’s outlook
On-chain analytics platform Santiment noted that Bitcoin’s high correlation with stocks means its further moves are likely to follow the S&P 500. According to the platform, fresh gains in the benchmark index would probably translate into upward pressure on Bitcoin’s price.
“Positive Monday is a good sign for the week to come and a continuation of a cryptocurrency rebound,” Santiment wrote.
👀 Many eyes from the #crypto crowd will be on the incredibly close tie that #Bitcoin has had to the fluctuations of the volatile #SP500. A positive Monday will be a good sign for the week to come, and a continuation of a #cryptocurrency rebound. 🤞https://t.co/yw8WW8jskm pic.twitter.com/7aD0VLOm5L
— Santiment (@santimentfeed) February 7, 2022
U.S. stocks rose during Monday’s early trading, with the S&P 500 up about 0.21% while the Nasdaq and Dow also advanced.
Anonymous crypto trader and Bitcoin analyst Rekt Capital said a new weekly close in positive territory “has confirmed a partial reclaim of the $38,000–$43,000 range.”
The rally also left Bitcoin hovering near its 50-week exponential moving average (EMA), which the analyst described as “the key moving average of the bull market.”
“The EMA represents roughly the $44,000 price level and could act as resistance. However, flipping it back to support would restore Bitcoin’s macro uptrend,” he added.
On the chart, Bitcoin’s 50-week EMA sits near $44,000, a key level for bulls.
Another analyst argued that the bounce means Bitcoin’s “most significant” resistance is now around $48,400.
#Bitcoin | The most significant resistance level ahead of $BTC sits around $48,400, based on @intotheblock’s GIOM model. #BTC pic.twitter.com/RI8Wio3lZK
— Ali (@ali_charts) February 7, 2022
Popular crypto analyst Josh Rager suggested that a strong weekly close could bolster bulls’ efforts to push toward $50,000. He said the chances of upward momentum improve if BTC/USD closes the week green for a second consecutive week.
$BTC
Zooming out, strong weekly close
Decent chance it could push up to $50k if the price closes out green again this week
Lot’s of chatter about bull-trap but R/R down here is decent especially when looking at higher time frames pic.twitter.com/v8ExJ3E855
— Rager (@Rager) February 7, 2022
Taking these perspectives together, a bullish week would likely see the BTC/USD pair turn the $40,000–$43,000 supply wall into a demand zone. If bulls can achieve that, the price action could mirror the recovery seen last July following a roughly 50% surge that began in May.
Bitcoin had plunged more than 20% in January and lost over 50% of its value before rebounding from a low near $33,000.