The Money Flow Index increased to level up from the lower 40s, indicating that the selling pressure has eased at the price level of Bitcoin.
$120 000-$140 000 could be possible if the trend is bullish, the resistance level being $ 124 000 and $ 140 000.
Higher market liquidity, positive fund flows and relatively, a conducive macroeconomic environment are positive signs for Bitcoin.
Bitcoin’s daily Money Flow Index (MFI) has recently shown a clear impulse to the upside, hinting at the possible further increase in the cryptocurrency’s price.While the recent MFI breakout coincides with the bullish tendencies all around the market, it will be necessary to observe how this situation will affect the Bitcoin price.
Historical Context and Price Correlation
In the daily chart of Bitcoin, prior breakouts of the MFI signal have occurred during a bullish run in most cases. Experts also indicate that similar action was seen in the final two months of 2020 before Bitcoin was on an upward spiral to reaching $ 60000. The MFI had been declining while drawing a descending resistance line at around 40 on the index. This breakout above formations put the price above this level suggesting that it was out of the selling pressure aside from the accumulation phase.
https://twitter.com/TATrader_Alan/status/1875816011502645457
In the past, when the MFI splits a descending resistance trendline, Bitcoin usually goes up in price. For instance:When the MFI rose above 40-50 toward the end of 2020, the BTC price jumped from $20,000 to $40,000 in a few weeks.At the present moment, BTC is around the $105,000 mark.Depending on the Cype, the breakout may lead to new upswings toward $120,000, with precious levels at $124,000 and $140,000.
However, traders are advised to pay attention to specific levels of resistance in the BTC/USD rate which was displayed with the MFI breakout. Hopes of the upper price limits being $120,000 – $140,000 remain ambitious but should act as resistance depending on the market trend.
Broader Market Dynamics
The MFI breakout comes at the correct time given that Bitcoins is today experiencing better market liquidity coupled with fresh inflows from institutions. Further, macro parameters including inflation ease and possible regulation are positive for cryptocurrencies in this regard. Investors need to bear in mind other factors; such as sentiment analysis and factors in the macroeconomic environment.
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