A rare buy signal has been printed on the Bitcoin (BTC) monthly chart, fueling the ongoing debate about the BTC price trajectory in the coming weeks. This development comes in the face of recent concerns about the stability of the traditional financial system.
A Rare Bitcoin Buy Signals Prints
According to a crypto analyst on X, the ADX/DI indicator formed a bullish crossover on the monthly chart for the first time in eight years. The trend and momentum-following tool is used mainly because of its ability to identify trend strength and potential reversals.
Sharing a chart, the analyst noted that the current formation is “eerily similar” in structure to when the same pattern was printed in 2016. Following this pattern in 2016, Bitcoin prices floated higher the next year, sparked by the ICO-euphoria. By December 2017, BTC prices topped $20,000, rallying from less than $500 the previous year when the ADX/DI indicator blinked the buy signal.
Still, whether this signal precedes a Bitcoin leg-up is yet to be seen. Technical indicators like ADX/DI usually lag since they use parameters derived from price or volume.
Moreover, as price action in the past shows, historical performance does not guarantee future results. Bitcoin and crypto are now increasingly intertwined with the global economy.
BTC prices can be impacted by macro risks and regulatory decisions like the recent Federal Reserve’s decision to hold interest rates.
Cracks In The United States Banking System, BTC To $1 Million?
The rare buy signal, however, comes amidst growing anxieties about the health of the United States banking system. Recent events, including a flash crash in NYCB share prices, have fueled speculation about potential vulnerabilities.
In light of these concerns, Arthur Hayes, the former co-founder of BitMEX–a derivatives crypto exchange, remains bullish on Bitcoin’s prospects.
Based on the investor’s outlook, there is a chance that further cracks in the United States banking system could trigger massive demand for Bitcoin as the United States Federal Reserve intervenes either through policy or by printing more money. If this happens, Hayes projects Bitcoin to reach $1 million, multiples above $69,000, the highs recorded in H2 2021.
Bitcoin is under pressure, as the daily chart shows. The coin is wavy below $43,000 and remains under pressure.
Key support levels remain at $40,000 and $39,500. Conversely, any break above $45,000 and $50,000 resistance lines may anchor the next wave higher, lifting the coin towards $70,000 or better.