Bitcoin has just surged to its highest level since January 4, establishing the first weekly closing above $45,500 this year.
This is a bullish indicator, as Bitcoin - the world's largest and most well-known cryptocurrency - smashes through the $44,500 resistance level, which has been rejected three times this year.
Bitcoin is up 41.1% year to date from its January 24 low of $32,950.72.
On Sunday, Ether, the cryptocurrency associated with the ethereum blockchain network, increased 3.92% to $3,270.67, a gain of $123.45 over its previous closing.
The breakout on the weekend may corroborate the daily chart's falling wedge pattern, given that market analysts have witnessed repeating higher lows all year.
While technical analysis can provide useful short-term trading signals, it is not necessarily trustworthy as a long-term investment indicator.
Technical analysis is not an exact science. To have a full understanding of why Bitcoin may be exploding, we must examine the broader socioeconomic situation.
The year has brought excellent news for cryptocurrency, which has been featured in headlines worldwide, from donations to aid Ukraine in the face of Russian aggression to positive attitude from European Union and United States legislators.
Many assumed we had passed the stage of crypto exploration and into a period of crypto adoption and blockchain invasion.
While Bitcoin is currently 30% off its all-time highs, it has fared well in 2022, with relatively minimal volatility by Bitcoin's own standards. Correlation with the S&P500 recently reached a 17-month high, demonstrating how stable the index has been.
Other popular coins have also increased in value: Polkadot (DOT) rose 7% in 24 hours, Dogecoin (DOGE) increased 6%, Solana (SOL) climbed 5%, Avalanche (AVAX) advanced 4%, XRP soared 3%, and Cardano (ADA) is up 4%.
Although the reason for the bounce was not immediately evident, it is likely a result of a number of variables that have been building over the short and long term, including crypto news and broader market movements.
For instance, the S&P 500 has climbed for seven consecutive days, and Bitcoin's correlation with stocks has reached a 17-month high.
Additionally, Do Kwon, the architect of the Terra (LUNA) system, stated on Twitter that he intends to purchase billions of dollars of Bitcoin and hold it in a reserve to support the stablecoin TerraUSD (UST).
The official Bitcoin wallet address of the Luna Foundation now owns over $1.1 billion, and Kwon intends to amass up to $10 billion in BTC.