Bitcoin Bulls aim to flip $44,000 to take control
Hopes for another significant rally in the crypto market are slowly returning despite Bitcoin being rejected at $45,500. Currently, the bulls are attempting to tighten defenses at the $43,000 support.
Data from TradingView shows that after rallying to a weekly high of $45,500 early on February 8, bears managed to push BTC price to $42,900 in afternoon trade as investors took profits and prepared to rally around $38,000 Offer.
BTC/USDT 4 hour chart | Source: TradingView
Here’s what analysts say kicked off last week’s Bitcoin price rally and what levels to watch for to move forward.
Good valid breakout short press?
The sudden rebound caught many traders across the crypto space by surprise who were anticipating the start of an extended bear market, but such dire warnings may have been premature, based on data from a recent Glassnode report. The blockchain analytics firm claims that “price has bounced off a number of fundamental factors that have historically signaled undervaluation, or below fair value.”
By analyzing liquidity data on futures exchanges, Glassnode suspects that although the chart of long liquidity dominance “shows that short is being attacked this week, with a slight divergence in liquidity.” Short”, the indicator ambiguity proves, ” that this is not the case is likely that the price rise will be mainly driven by a short squeeze”.
Change OI in futures contract Bitcoin Daily | Source: Glassnode
Glassnode notes that Open Interest (OI) futures have fallen significantly in previous instances of sharp price declines, also known as Leverage Reduction Events, represented by large red dips on the chart. Surprisingly, this didn’t happen on the last drop.
“This could indicate a lower likelihood of a short squeeze than originally estimated, or such an event could still occur if the market continues to rise and hit short stop-loss/liquidation levels.”
“We are still in a dealer market”
David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, pointed to forces in the broader financial markets affecting the price of Bitcoin. Highlighting the recent correlation between BTC and tech stocks, he wondered what will help “Bitcoin regain its destiny?”
According to Lifchitz, “stocks are still in dreamland while bonds are more realistic,” which helps paint a clearer picture of the strength of global financial markets based on the fact that “bonds are struggling against the trend that drives stocks and bonds has”.
When it comes to what happens next for bitcoin, Lifchitz offered some reassurance to bulls worried about the large head and shoulders pattern on the chart, saying that the pattern was “resolved by the recent price surge of BTC undervalued”.
Looking ahead, Lifchitz has identified near-term targets for Bitcoin at $48,000, $51,000 and $53,000, but cautioned that there is a possibility of a “pullback to the mid/high $30,000” before hitting $53,000.
“Meanwhile, we’re still in a dealer’s market with a chance to hit a few soft targets: Profits seem impossible on any small pullback, then sell and repeat. Without macro catalysts, it’s hard to see Bitcoin trending higher in a straight line.”
Bitcoin is the “Amazon of our time”
Analysts at Macro Hive, a financial market research firm that considers Bitcoin the “Amazon of our time,” have provided the latest look at Bitcoin’s price action relative to its growth.
Macro Hive emphasizes that “even Amazon is going through massive drops that take years to recover,” and they suggest, “Your exposure to Bitcoin needs to be the right size to survive with.” Reductions from 50% to 80% %”.
“But falling prices also offer a good entry point. Our metrics show we’re getting close to that point, so we’ll consider accumulating presence. However, we will not stay long in an environment of rising central bank rates and slowing global growth momentum.”
Amazon share price development | Source: MacroHive
The total crypto market cap is currently $2.1 trillion and Bitcoin’s dominance is 39.8%.
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