Bitcoin (BTC) price rebounded from its recent low of $ 11,125 on August 11 to $ 11,617 today. This suggests that traders are getting bullish as the main data shows high liquidity for BTC up to $ 12,000.
As the price of BTC rose, several of the major currencies rose at the same time. Chainlink (LINK), which saw strong gains over the week, posted gains of 19.6%. DeFi-related tokens such as Compound (COMP), Maker (MKR), Aave (LEND) and Cosmos (ATOM) recorded increases of between 20% and 50%.
Reasons for traders to remain optimistic about Bitcoin
In the past, Bitcoin price has moved towards the regions with the highest liquidity, and whales tend to target areas with a series of buy or sell orders in order to find adequate liquidity.
For example, if bitcoin is oversold, it will be subject to a short squeeze as whales are likely to target short-term liquidation prices. When short positions are liquidated, short sellers must buy in the market, resulting in a buy order.
A trader under the pseudonym “General Byzantine” cited data from Hyblockcapital indicating that there is high liquidity in the $ 11,500 to $ 12,000 range. It appears that many traders trimmed Bitcoin on their way down, resulting in short liquidation rates of around $ 12,000. The merchant said:
“Green day today. Who would have thought that? Except me of course. There is still a lot of liquidity above us. I say we keep making progress. “”
Another popular crypto trader on Twitter known as “Redxbt” said the Bitcoin fetch “may still have legs” suggesting that Bitcoin is breaking the $ 11,550 resistance level to indicate that the uptrend will continue.
This bullish near-term outlook for traders coincides with an accurate historical indication that an uptrend is imminent. The Bitcoin Hash Ribbon lit up for the first time since a rally when BTC hovered at $ 9,500.
Market data provider Glassnode said:
“The Bitcoin Hash Ribbon Indicator can be used to spot market lows due to the miner’s surrender. It last displayed a buy signal when BTC was at $ 9,500, which has been over 20% since then.”
Ecstasy is entering the cryptocurrency market
Over the past few weeks, the digital currency market has significantly increased the appetite for small and mid-market assets. Led by DeFi craze, cryptocurrencies have far outperformed Bitcoin since early August.
John Todaro, Head of Research at TradeBlock said:
“This crypto market reminds me of the mid-2017s when most of the major media outlets ignored the space overall while the average performers did 10-15x.”
In the medium to long term, the strong performance of altcoins could trigger a strong rally in Bitcoin. Previous price cycles show that a surge in the cryptocurrency market is followed by an increase in profit-taking when the revenue flows into Bitcoin and Ether (ETH).