Bitcoin performs a three-day rally and targets $43,000; what to expect now?

The immense volatility to which Bitcoin accustomed us has fallen on the side of the bulls, who are pushing the price of the crypto-asset above the resistance in the $40,000 - $42,000 area. Monday's high is already touching $43,000, a change not seen since the beginning of January, which translates into three days of rally for the most traded of the digital currencies and all eyes are on $45,000 as the next target.

During the last 24 hours, the digital asset accumulates rises of almost 3%, as does Ether - the Ethereum network unit - which is seeking $3,100, after also chaining three bullish sessions. The first and second cryptographic coins on the market have made gains in the last seven days of 15% and 23%, respectively, while the other altcoins have risen by 4% on average, with the exception of Ripple, that is up 10%, and Dogecoin, which is up almost 7%.

The crypto currencies' rally began on Friday, when Bitcoin managed to break through the $40,000 area, a price level that had been a major support throughout the previous bullish phase and had now become a control zone. However, according to data compiled by 'CoinDesk', Bitcoin trading volume on the major centralized exchanges over the weekend was down significantly since Friday, but has been in line with most days last week, when it was down as Asia's major cryptocurrency markets were closed for the Lunar New Year holidays.

The digital currency has remained above $37,000 over the weekend, signaling a recovery phase. Still, the price is unlikely to rise significantly if the negative momentum signals on the monthly chart are confirmed. It has now broken above its 50-day moving average for the first time in more than two months on Monday.

Bullish momentum is improving after technical indicators reached the most oversold levels since March 2020. Buyers will need the decisive move above $40,000 to finish confirming to reverse the downtrend in price from the November high around $69,000. In recent months, brief rallies have been limited below resistance levels, meaning that sellers have been in control.

In the short term, however, Bitcoin could see additional upside, especially since the relative strength index (RSI) is not overbought on the daily chart. The next resistance level is around $45,000, and that could put a brake on the current rally. Other experts suggest that buying has the potential to push the price up to the $46,000-$47,000 area.

STRONG CORRELATION WITH WALL STREET TECHS

The short-term uptrend for the crypto queen started on Friday following the better-than-expected U.S. jobs report and thanks to strong results from Amazon. The cryptocurrency has been correlated with risk assets in recent months, as it is perceived this way by traditional asset managers.

Previously, cryptocurrency prices were under pressure due to growth, and risk assets were under fire because of the anticipation of interest rate hikes from central banks. Facebook's earnings report dented investor sentiment. However, "cryptocurrency traders turned optimistic after Amazon's better-than-expected earnings report, as did Google, Apple and Microsoft. Positive earnings from these companies helped revive investors' risk appetite and helped boost cryptocurrency prices," stated Naeem Aslam, head of analytics at Avatrade.