Gareth Soloway, the chief market strategist at stock technical guidance platform InTheMoneyStocks.com, has said that if Bitcoin manages to sustain its recent highs, the asset will be ready for a new breakout.
Speaking to Kitco news, Soloway suggested that a breakout of $75,00 to $77,000 is possible for Bitcoin if it sustains trading above $67,000 for at least two weeks.
According to Soloway, highs do not mean that investors will pump in money because they are cautious about jumping in for any asset class. He stated that for any highs, there is a possibility of a corresponding price correction, and Bitcoin might potentially be affected.
“The last thing an investor wants to do is jump in the right at the highs. A double top, historically, whether they’re stock charts or crypto charts, there can be significant highs before major moves to the downside. So, the last thing an investor wants to do is put in new capital before knowing for sure that this is a major break to the upside. Now, if it gets kind of above the recent highs and holds above $67,000 for a week or two, then I think it will go to at least $75,000 to $77,000. That’s my next calculated resistance level,” Soloway said.
Initially, Soloway had projected that if Bitcoin fails to breach the $65,000 mark, it might correct to $20,000. However, he noted that the projection was based on previous cycles. He states that the current momentum does not correlate with previous rallies because the asset is struggling around the April 2021 record high.
Bitcoin correlation with the stock market
Soloway also added that Bitcoin’s price movement currently correlates with the stock market. He said that if the stock market plunges, then it will drag Bitcoin down.
Notably, Bitcoin recently gained a new all-time high after U.S. regulators approved the first exchange-traded fund. However, Soloway expressed skepticism if the product has ushered in enough new investors to push Bitcoin to new highs.
Besides Bitcoin’s potential rally, Mr. Gareth also projected that the stock market is bound for a bearish momentum that will run into the new year. Elsewhere he noted that gold’s breakout is now possible but highly dependent on inflation and interest rates.
According to Soloway, if interest rates are rising because of inflation, gold will likely outperform.
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