Bitcoin renewed its climb towards US$30 000 with risk appetite rising across global markets and concern about the fallout from Binance’s legal woes waning.
The largest cryptocurrency by market value rose for a second day, gaining as much as 4.9% to $28 638 on Wednesday. It had climbed to just below $29 000 on 22 March, the highest since June. Other tokens also rallied, with XRP jumping about 9%, Cardano increasing 7% and Polygon rising 4%. Ether was up less than 2%.
Bitcoin touched a 10-day low on Monday after Binance Holdings, the world’s largest crypto exchange, was sued by the US Commodity Futures Trading Commission for allegedly breaking trading and derivatives rules. Binance said it didn’t agree with the characterisation of many of the issues alleged in the complaint.
One measure technical analysts use suggests that the price gains may continue. The “relative strength index” or RSI for bitcoin crossed a crucial threshold on Wednesday, signalling the potential for more upward momentum to the cryptocurrency’s 66% price rally in 2023.
Bitcoin’s monthly RSI crossed above 50, a level it had dropped below in May last year following the collapse of Terra’s algorithmic stablecoin project. A move above 50 indicates that price momentum has transitioned to a bullish regime and a move below, the opposite.
Since the major low recorded in January 2015, there have only been three other instances when this happened: October 2015, April 2019 and April 2020. The average returns three and 12 months after were 26% and 182%. Although the monthly RSI has crossed above 50, the signal will be cemented only if the level is maintained on the last trading day of the month.