Bitcoin eyes US$60K target as price consolidation sets the stage for a potential breakout

Bitcoin (BTC) has been trading in a tight range between US$52,000 and US$58,000 for the past two weeks, consolidating its gains after reaching a new all-time high of US$66,900 on November 10, 2023. The cryptocurrency is showing signs of strength and resilience, as it holds above key support levels and prepares for another breakout attempt.

Several factors are supporting Bitcoin's bullish outlook, such as:

Strong institutional demand: Bitcoin has seen a surge of inflows from institutional investors, who are seeking exposure to the leading digital asset as a hedge against inflation and currency debasement. According to data from CoinShares, Bitcoin spot ETFs have attracted over US$1.5 billion in the first two weeks of February, while Bitcoin futures ETFs have seen over US$2.7 billion in assets under management since their launch in October 2023. These products offer investors a convenient and regulated way to access Bitcoin, without having to deal with the technical and security challenges of holding the cryptocurrency directly.

Positive network fundamentals: The Bitcoin network is also showing healthy growth and activity, as evidenced by several on-chain metrics. The number of active addresses, which measures the number of unique participants in the network, has reached over 32 million, the highest level since January 2023. The hash rate, which measures the computing power securing the network, has recovered from the China mining ban and reached a new all-time high of over 250 exahashes per second. The difficulty, which adjusts the mining difficulty based on the hash rate, has also increased by over 50% since July 2023, indicating a high level of competition and security.

Favorable technical indicators: Bitcoin's price action is also indicating a bullish trend, as it remains above the 50-day and 200-day moving averages, which are widely used as indicators of long-term momentum. The 50-day moving average is currently at around US$54,000, while the 200-day moving average is at around US$46,000. Additionally, the relative strength index (RSI), which measures the speed and magnitude of price movements, is hovering around 60, suggesting that Bitcoin is neither overbought nor oversold, and has room for further upside.

Given these factors, Bitcoin is likely to aim for the US$60,000 resistance level, which has acted as a psychological barrier in the past. If Bitcoin can break above this level with strong volume and conviction, it could pave the way for a retest of its all-time high of US$66,900, and potentially reach new highs shortly.