A respected Wall Street chart analyst forecasts that the price of Bitcoin (BTC) will reach $56,000 U.S. this year as the current rally in cryptocurrencies gathers steam.
William Noble, director of research at Emerging Assets Group and a former analyst at investment banks Goldman Sachs (GS) and Morgan Stanley (MS), says that charts indicate Bitcoin is poised for a parabolic move back to $56,000 U.S.
Noble correctly predicted Bitcoin’s late 2020 surge from $20,000 U.S. to $40,000 U.S. and says that the current rally in the digital asset is accelerating at a breathtaking rate.
The forecast from Noble comes as the price of Bitcoin surged 11% in overnight trading to near $25,000 U.S.
The value of the entire cryptocurrency market has risen more than $84 billion U.S. in the past 24 hours, extending a rally that began at the start of this year.
Bitcoin’s price is now at its highest level since August 2022, having risen 49% since the start of January.
Noble says that a widely-tracked momentum indicator relative strength index has diverged bullishly in Bitcoin’s favour, showing that the current rally is likely to continue.
Another good sign for cryptocurrencies is that the Nasdaq index, which is comprised mostly of technology stocks, has broken out of a so called “bull flag,” a technical pattern known to accelerate an uptrend.
Bitcoin’s 90-day correlation with the Nasdaq index has increased to 0.75, indicating that the two assets are now moving in tandem. The Nasdaq has risen 16% so far in 2023.
The current rally in cryptocurrencies comes despite tougher enforcement actions from U.S. regulators and threats of an industry wide crackdown from politicians in Washington, D.C.
Positive sentiment towards riskier assets such as cryptocurrencies appears to have returned, aided by a view that any economic downturn might not be as bad as feared, and that the U.S. Federal Reserve will soon slow its pace of interest rate increases.
