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- Many industry experts agree that Bitcoin is about to start a new bullish cycle, which could lead to a new all-time high.
- There are 5 key factors, which could usher in a new uptrend in the medium and long term.
In the latest technical analysis of Bitcoin in different timeframes, we discussed the possibility of the start of a new bull market. Today we will explain 5 key factores that could be the catalyst of a new economic cycle for Bitcoin and that could also affect other cryptocurrencies.
1. Increasingly high minimums and maximums
As we can see in the daily chart, since mid-December, the price of Bitcoin has managed to start a rally, marking candle closures with ever higher lows and highs.
This pattern indicates that the prevailing sentiment at the moment is buying, and the rally is stable, as the climb is taking place through gradual rises and retracements, and not caused by strong artificial rises in short periods of time.
Another positive aspect, as we mentioned in the previous analysis, is that this rally has achieved another important milestone, which is to break the downtrend channel started in July last year.
2. Monthly candle closure
We also outlined the importance of the monthly chart, and the patterns of Japanese candlesticks that were beginning to form.
As we can see in the image, once the monthly candle is closed, we can confirm a “Doji Morning Star” pattern, which could result in the start of a new bullish cycle.
This candlestick pattern occurs when the previous trend is bearish, and its formation should be preceded by a red candlestick with a large body and closing close to its minimum level, and a bullish Doji Star that closes near the start of its session.
In this time frame, we can see how these two premises are fulfilled, and the Doji Morning Star manages to break its two predecessor candles, forming a large body (more than $2,000) and closing at its maximum level.
3. The Halving effect
In May this year the Bitcoin halving will take place. This event causes two effects: The offer of Bitcoin is considerably reduced and miners lose purchasing power by reducing rewards.
Historically, on a logarithmic scale, halving has always marked the beginning of a new bullish Bitcoin cycle, and as can be seen in the image, the next reduction in rewards could have the same impact.
4. Increased Hashrate
This effect may be promoted by the imminent arrival of the Bitcoin halving, hence, this year, we are also seeing an extreme increase in the hash rate.
The hash rate is the ability of hashes that a miner can run in a certain amount of time, which results in an increase in mining capacity on the network.
The Twitter user “The Moon” was the one who encouraged that the hash rate had reached a new all-time high this year, recording the mark of 123,011,832 TH/s.
The #Bitcoin hash rate JUST HIT a new ALL-TIME-HIGH!
A whopping 123,011,832 TH/s!!!
The $BTC fundamentals are screaming for a huge bull run leading into the halving! 🚀
BULLISH!! pic.twitter.com/HB6JLSy6V0
— Carl From The Moon (@TheMoonCarl) January 30, 2020
5. Increased Bitcoin addresses
As Blockchain.com reports, the total number of unique addresses on the Bitcoin blockchain has increased, compared to data recorded in 2018, when Bitcoin was in the final phase of its bullish cycle.
This effect induces us to think of a greater interest of people in using and storing BTC.
With these five promising key factors and the psychological factor of traders this could lead to new euphoria and a further increasing Bitcoin price.
