Bitcoin (BTC) surged above $41,000 on Feb. 28, a new sign of a recovery in buying sentiment after last week’s violent selloff in risk-prone markets including the S&P 500.
The price of BTC jumped more than 9% to $41,300, in part as traders reacted to the ongoing development of the Russian-Ukrainian crisis. At the same time, the cryptocurrency briefly broke the connection with the US stock market indices to look more like safe haven gold, the price of which also rose in early trading on February 28.
Daily price chart of BTC/USD vs. XAUUSD and S&P 500. Source: TradingView
Bitcoin Downtrend Highlighted – Analyst
Johal Miles, an independent market analyst, found “significant buying pressure” in the market, adding that its downtrend could lead to exhaustion.
Miles highlighted Bitcoin’s recent bullish rebound as he tested support levels close to $34,000. For example, on January 24 and February 24, the price of BTC formed a bullish hammer on the daily chart, indicating a reversal in the opposite direction during a sustained downtrend.
Daily BTC/USD price chart. Source: Johal Miles, TradingView
The same bullish hammers appeared last year in May and June, bottoming below the main $30,000 support level. This was followed by a sharp price reversal in the bitcoin market as the price of bitcoin hit $69,000 in November 2021.
Additionally, Miles noted that buying sentiment around $28,500 to $34,200 was relatively higher than around $46,000, Bitcoin support bottomed out in January 2022.
“The main difference between the current range and the range we had previously at $46,000 is that we are now seeing significant buying pressure as we hit a low,” the analyst tweeted Feb. 28, adding:
Exhaustion from below, like summer.
BTC to 64 thousand dollars?
Alexander Tkachenko, CEO and founder of VNX, a Luxembourg-based token issuance platform, highlighted Bitcoin’s ability to reverse sharply after a certain bottom in the US stock market, adding that the price could reach $64,000 based on the Wyckoff methodology.
Daily BTC/USD price chart showing the Wycoff pattern. Source: Trading View
“From a global perspective, everything indicates that Bitcoin has entered a phase of restructuring in accordance with the Wyckoff method,” he told Cointelegraph, adding:
“We can expect a move towards $64,000 and another uptrend in the medium term. The potential rise in the price of bitcoin is inevitable, as expected, especially depending on the currency’s close ties to the conventional or traditional market, the S&P index.
Macroanalysts also noted that the S&P 500 may have started to decline after a historic reversal on February 24th. In particular, the index rose by about 4.5%, despite the fact that it initially fell by more than 2.5%. This growth has not been seen since the financial crisis of 2008.
Except when the economy is not in recession, sharp reversals in the stock market during a price correction “indicate a classic bear market rally,” said Chris Murphy, co-director of derivatives strategy at Susquehanna Group International.
“The historical priority is that we are [close to the lowest levels of the ongoing correction] if we avoid a recession,” he told Business Insider, highlighting the improvement in U.S. economic data, which ranges from a strong consumer balance to a record high corporate balance. income to the stronger. labor market.
The SPX daily price chart gave the MACD indicator. Source: Trading View
Opinions are in line with FS Insight’s recent analysis of the S&P 500 market. The company, co-founded by Tom Lee, a former equity strategist at JPMorgan, said the index is showing signs of improvement.
Related Topics: Hodl, Don’t Trade, Says AI Bitcoin Trading Robot
“Prices remain below previous day’s highs amid negative bearish momentum,” Mark Newton, head of technical strategy at FS, said in a note, adding:
“I prefer to be long and long down and I expect markets to perform higher than the FOMC in March and the gains outweigh the cost.”