The largest cryptocurrency, Bitcoin, has broken beyond $46,500, threatening to set a new yearly high.
Bitcoin has recently climbed to its highest level since January 4, resulting in the first weekly close above $45,500 in 2022.
The move is a bullish indicator because BTC has broken through the $44,500 resistance level, which has been rejected three times this year.
The breakthrough could confirm the falling wedge pattern that has been seen on the daily chart all year, as we have seen repeating higher lows.
Technical analysis can provide useful short-term trading signals, but it is not always a trustworthy indicator for long-term investing.
Technical analysis isn't a precise science. We need to look at the broader socio-economic climate to obtain a clear understanding of why Bitcoin might be breaking out.
The year has seen a lot of excellent news for cryptocurrency, which has been in the news all over the world, from donations to help Ukraine in the face of Russian aggression to supportive attitude from European and American legislators.
Many people say we've passed through the era of crypto prospecting and are now in the midst of crypto acceptance and blockchain mainstreaming.
While Bitcoin remains 30% behind all-time highs, it has fared well in 2022, with relatively minimal volatility by its own norms. Its correlation to the S&P500 just touched a 17-month high, demonstrating its consistency.