A rare buying signal has emerged on Bitcoin’s monthly chart, fueling ongoing debates about the cryptocurrency’s price trajectory in the coming weeks. This development comes amid recent concerns about the stability of the traditional financial system.
Analysts point out that the ADX/DI indicator has formed a crossover in the upward trend on the monthly chart for the first time in 8 years. This trend and momentum tracking tool is predominantly used for its ability to gauge trend strength and potential reversals.
The current formation bears a peculiar resemblance to a pattern observed in 2016. According to this pattern, in 2016, Bitcoin’s price surged higher in the following year, sparked by the excitement surrounding Initial Coin Offerings (ICOs). By December 2017, Bitcoin reached its peak at $20,000, soaring from below $500 in 2016, coinciding with the ADX/DI indicator flashing a buying signal.
However, what has occurred in history is not necessarily guaranteed to repeat in the future. Bitcoin, in particular, and the overall cryptocurrency market are increasingly intertwined with the global economy.
Related: Bitcoin Drops Below $43,000: Market Sentiment Takes a Hit
The price of Bitcoin may be influenced by macroeconomic risks and legal decisions, as well as the recent interest rate decisions of the Federal Reserve (FED).
Based on investor sentiments, there is a possibility that further cracks in the U.S. banking system could trigger significant demand for Bitcoin, as the FED intervenes through policies or by printing more money. If this scenario unfolds, Arthur Hayes predicts that Bitcoin could reach $1 million.
