Hopes have returned for another big rally in the cryptocurrency market, despite Bitcoin (BTC) dropping to $45,500. At the moment, the bulls are looking to intensify their defense at the $43,000 support level.
Data from Cointelegraph Markets Pro and TradingView shows that after hitting a weekly high of $45,500 early on February 8, the Bears managed to push the price of BTC to $42,900 during intraday trading as investors took profits and prepared to place orders. About $38,000.
BTC/USDT 1-day chart. Source: Trading View
Here’s what the analysts have to say, what drove the price of BTC higher over the past week, and what levels you should watch for in the future.
A legal blowout or a short hug?
The sudden rise alarmed many traders as cryptocurrency headlines predicted the start of an extended bear market, but these strong warnings may have been premature, according to a recent report from Glassnode. The blockchain analysis firm said that “prices have rebounded from a number of key levels that historically have indicated a drop in valuation or a ‘fair’ price.”
By analyzing futures exchange liquidation data, Glassnode suggested that while its long liquidation control charts “show that the sell-off was late this week with a slight bias towards short liquidation,” the weak volume of this account “indicates that this is not likely”. . That the price side is primarily driven by selling pressure.”
Daily interest rate change on Bitcoin futures contracts. Source: glassnode
Glassnode notes that in previous cases of significant price drops, open interest (OI) futures have seen significant reversals or “event de-efficacy” as evidenced by the large declining red tops in the chart above, a feature conspicuously absent from this latest price. He refuses.
“This could indicate that the potential for a short squeeze is lower than originally thought, or that such an event is still possible if the market continues to rise and groups of short positions sell off stop/liquidation levels.”
‘We are still in the market’
The forces in the broader financial markets affecting the price of bitcoin were revealed by David Lifshitz, CEO and CIO of ExoAlpha, who highlighted the recent relationship between BTC and tech stocks and questioned what it might take for “Bitcoin to regain its destiny”. in your hands “.
According to Lifshitz, “Equities are still in ‘la la land’ while bonds are more realistic, which helps give a clearer picture of the strength of global financial markets based on the fact that ‘bonds tend to lead’.. equities and bonds are already struggling.”
When it comes to Bitcoin’s next move, Lifshitz calmed bulls who were worried about a large head and shoulders pattern on the BTC chart by saying that the pattern was “invalid due to the recent rally in BTC price”.
Looking ahead, Lifshitz set short-term targets for Bitcoin at $48,000, $51,000 and $53,000, but warned of the potential for “mid/high $30,000 withdrawals” before it reaches $53,000.
“At the same time, we are still in the trading market and have the ability to take a few pips here and there among the easy targets: Profits need to be quickly removed from the table on every small withdrawal, so repeat the flow. Without a major catalyst, it is difficult to see Bitcoin trend much higher in the future. Straight line “.
Related: DOJ Seizes $3.6 Billion of Cryptocurrency, Two Arrests in 2016 Bitfinex Hack
Bitcoin is the ‘Amazon of our time’
The final analysis of Bitcoin’s price behavior in comparison to Amazon’s stock price appreciation was provided by analysts from Macro Hive, a financial market research center that considers Bitcoin the “Amazon of our time.”
Macro Hive emphasized that “even Amazon has had big moves that took years to recover” and suggested that “your exposure to bitcoin needs to be adequate so you can survive 50% to 80% of the moves.”