Bitcoin returns to the highs of the current rangeAt the time of writing, the first cryptocurrency trading price by market capitalization was $41,300, and the profit on the daily chart was 6% and 23.8%, respectively.
The general sentiment in the market has turned bullish, and the Fear and Greed Index has signaled greed for the first time in months. As many experts have pointed out, other indicators indicate a clear shift in the market. The bulls may see more green days in the coming weeks.
Glassnode’s data, provided by the CIO of Moskovski Capital Lex Moskovski, record The number of bitcoins held by the “strongest holders” has increased. According to the Illiquid Supply indicator, these holders have risen to an all-time high and recommend a “bullish” price action.
Charles Edwards, founder of Capriole Investments It shows that the number of people who hold Bitcoin for a long time has increased. According to the HOLD Waves indicator, the supply of such investors has been increasing since the crash in May 2021.Edwards Add to:
This sharp rise has never occurred in the early stages of the previous bear market, which indicates that the Bitcoin bull market cycle may still be intact.
Other data provided by Edwards shows that since Bitcoin soared from its annual opening price of about $29,000 to its current level last week, the exchange platform has seen “the first positive outflow”. This indicator indicates that demand in the crypto market may recover and may support further appreciation.
A few days before the current price trend, As mentioned earlier, Bitcoin has fallen from approximately $35,000 to its annual opening price. Edwards called this price movement a “failed breakthrough” because sellers were exhausted at these lows and were unable to push prices down further. He added:
The subsequent upward squeeze was supported by a large number of short markets and was overexposed to stable currency contracts. This resulted in a brief squeeze last week, culminating in a highlighted candle (…)
Bitcoin fundamentals turn positive, bulls regain control?
Edwards reviewed other indicators, such as the Hash Ribbon indicator, and thought it looked “promising.” After China banned the mining of Bitcoin from the country, this indicator dropped sharply. The miners had to move to more friendly destinations.
Bitcoin’s hash rate and its energy value have been rising. Edwards found that both of these indicators have increased by about 8%, indicating that the migration of miners has ended. Another bullish factor, because these entities can stop selling BTC; the market may see selling pressure weaken. However, investors must be cautious:
The computing power has shown a positive and strong trend, which is no different from December 2018, indicating that it may bottom out. However, computing power may give various false alarms during the surrender. This is why we remain cautious until the Hash Ribbon buy signal is confirmed.
In the next few days, Bitcoin may see more accumulations near its current levels, and it is “more likely” to rise again to the mid-level of $45,000. If the price of BTC retreats, the expiration zone is $39,000.
The macroeconomic outlook brings potential tailwinds and risks to Bitcoin. Edwards claimed that if financial institutions continue to print money, the Fed and its inflationary monetary policy may continue to boost BTC.
There are potential risks in the traditional market. If the stock market crashes, Bitcoin may follow suit. Cryptocurrencies and the S&P 500 index show a high degree of correlation. Therefore, if it falls, it may impair its chances of regaining previous highs. Edwards concluded:
At present, the fundamentals and technical aspects are leaning upwards. Our basic situation is that we will reach a mid-to-high level of US$40,000 in the next few weeks. In the short term, if we fall below $39,000, this argument will be verified. Finally, the history of the Bitcoin cycle tells us that we must be alert to significant volatility and downside risks before the situation improves further.