Bitcoin’s next pullback is a buying opportunity before price heads to $40,000, says Wolfe Research

Published Tue, Nov 28 20236:36 AM ESTUpdated Tue, Nov 28 20237:38 AM EST

Bitcoin's price may be due for one more pullback in the coming weeks and that could be a good opportunity to buy more of the cryptocurrency before its next leg up, according to Wolfe Research. The flagship cryptocurrency has been riding a wave of positive momentum driven primarily by enthusiasm surrounding the prospects for regulatory approval of a spot bitcoin ETF in the U.S. After stagnating around $30,000 for much of the year, bitcoin has steadily climbed to new 2023 highs in recent weeks – breaking past $38,000 on Friday, after reaching $37,000 just a couple weeks prior. The next stop could be as high as $40,000, according to Wolfe's Rob Ginsberg. "[Bitcoin] now sits within reach of having retraced 50% of the decline off its highs," Ginsberg wrote in a note last week. "With ETF excitement growing and money continuing to pour into the space, we feel there's plenty of upside left to be had. However … near term price action may provide for one more buying opportunity before continuing higher." BTC.CM= 1Y mountain Bitcoin (BTC) now has retraced nearly 50% of the decline off its 2021 all-time high. "As MACD [moving average convergence/divergence] rolls over and overbought conditions come in, all signs point toward a near-term pullback," he added. "We would use it as a buying opportunity as the next move higher likely takes price above $40,000." Ginsberg pointed to bitcoin's "wildly impressive" year in total, with a year-to-date gain of 120% – despite months of lethargy in the spring and summer. Although on Tuesday bitcoin was back down to about $37,200, according to Coin Metrics, it has still retraced nearly 50% of its decline from roughly $69,300 in November 2021 to about $15,200 at the end of 2022. Meanwhile, ether is retesting and consolidating at the $2,000 level, which it hit earlier this month for the first time since April and which has proven a ceiling for the second largest crypto coin for more than a year. Ginsberg said ether is "right on the cusp" of a breakout. —CNBC's Michael Bloom contributed reporting.