Opinion: Bitcoin bullish signal has arrived, and it needs to follow its own independent trend line

Crypto analyst Will Woo has released more encouraging market evidence of an impending Bitcoin rally. Bitcoin appears to be breaking away from the S&P 500 as global commodity markets roil. The move shows clear interest from a wide range of investors.

Bitcoin has its own course in the market

Woo noted that Bitcoin’s trend separation from the S&P 500 began three days ago. This is when gold also began to show a unique market pattern. Notably, the leading cryptocurrency is now showing signs of accumulation. If true, then crypto investors may have moved past the early chaos caused by the current global health crisis and are looking to buy Bitcoin at a discount.

Woo tweeted:

“The next key event is confirmation of BTC decoupling from traditional markets. There are a bunch of charts here and many are bullish. I will note that I don’t expect a V-shaped bottom, I think there will be time before the upside, an accumulation range.

Gold and BTC trend charts suggest a decoupling from the S&P 500 starting 3 days ago. Gold may be forming a double bottom while Bitcoin may be forming an accumulation pattern.”

The analyst also pointed to Bitcoin’s relative strength index (RSI), which is in a very favorable position. In particular, long-term investments at this level have been profitable.

“SOPR (spent output profit rate), which is the net position of investors on the chain, is recovering. Investors who were beaten up are now exiting. This is a bullish signal. (Picture from: coinmetrics)”

The price of Bitcoin has seen a strong rebound over the past twenty-four hours. It has surpassed $6,000 for the first time since last week’s major market correction. Even if a retracement occurs, this rebound is good news.

Furthermore, despite the current conditions, Bitcoin has been one of the best investments of the past few months. In fact, it is still up $2,000 compared to the same period last year. Most altcoins are also up significantly.

Many factors influence current prices

With all global commodity markets in disarray, the entire crypto market is expected to continue to fluctuate wildly. However, some specific factors can be tied to Bitcoin's current situation. The news that the U.S. Treasury Department is exploring direct cash payments to the American public has fueled optimism, as such a move would almost certainly spur a flood of investment. Likewise, evidence of large buy orders from those with deep pockets is also having an impact.

Serious cryptocurrency advocates can also observe that before the COVID-19 crisis (before the Spring Festival), all signs pointed to a major recovery in the market. So far, the data pointing to this fact has not changed. Bitcoin's May halving is still going to happen, development and adoption are in good shape, and overall blockchain activity continues to grow, which are all positive signs. On the negative side, many altcoin development teams are experiencing a severe cash crunch. However, this situation may be seen as positive for Bitcoin.

The current volatile phase also demonstrates the significant risks associated with speculative trading. Margin traders holding long positions have suffered huge losses over the past few days. In short, the best strategy for most investors remains prudent research and continued additions to positions (not all in at once).