Bitcoin (BTC) could see a “massive bullish move” if a classic trigger from the 2021 bull run repeats this week.
In a tweet on Dec. 16, on-chain analyst Matthew Hyland, known by the Twitter handle Parabolic Matt, drew attention to Bitcoin’s momentum indicator.
Momentum indicator hints at potential "massive bullish move"
While still under $50,000, Bitcoin has already broken out of a long-term downtrend on the momentum indicator, which measures closing prices against those from a period in the past.
Two such breakouts have occurred this year, and after each one, BTC/USD went on to see considerable upside.
“The previous two times it broke out of a multi-month downtrend this year, a massive bullish move followed,” Hyland wrote as part of comments.
While not a guarantee of “up only” price action, the momentum data joins a large number of on-chain metrics flashing bull signals this month — a list that keeps growing.
Hyland is known for his highly optimistic price forecasts, and last month caused a stir by predicting that Bitcoin would hit $250,000 in January 2022 while invalidating one of the popular stock-to-flow price models.
#Bitcoin bottom structure on the RSI and Momentum indicators (daily time frame) look very similar to what occurred in September before the reversal up started— Matthew Hyland (@Parabolic_Matt) December 15, 2021
•Momentum has broken out
•RSI needs a close above resistance to confirm breakout
•Bitcoin price waiting to breakout pic.twitter.com/XDwiUsSj2U
In further analysis, he noted that both the momentum indicator and Bitcoin’s relative strength index (RSI) on daily timeframes are mimicking behavior from September, when the market put in a local bottom before rising to current $69,000 all-time highs.
Dollar dives post Fed
Spot price action was meanwhile quieter on Dec. 15, Bitcoin lingering around $49,000 despite a conspicuous drop in the U.S. dollar.
The U.S. dollar currency index (DXY), which measures USD against a basket of trading partner currencies, reversed its extended bull run last week, with Dec. 1 seeing a pronounced comedown, data from TradingView shows.
Traditionally inversely correlated with BTC, DXY's drop follows a boost for crypto and equities alike courtesy of the Federal Reserve.