Bitcoin has endured some volatile days over the past week and faced its first serious geopolitical conflict in its entire existence.

Macro concerns have not cooled yet, but given the past few days, Bitcoin has surprised many investors as it bounced back from $34,000. This buying pressure came from exchanges FTX and Bitfinex, pushing the price to $40,000. This also correlates with Wall Street’s turnaround on Thursday (Nasdaq posted a 7% gain on the day).

The uncertainty and fear in the market and the positive momentum of the price movements are building a trading range between $34,000 and $40,000 for Bitcoin.

Technical Analysis

Medium and long term

Bitcoin is currently facing a new “challenge” in its short life: a geopolitical crisis. The Russia-Ukraine conflict has created extreme fear in all markets; As a result, risk assets began falling en masse Thursday morning.

The price even broke below $36,000 within a few hours, but Bitcoin surprised investors. It looks like the big players created massive buying pressure (mainly on Bitfinex), propelled the price above $36,000 and then a big rally towards $40,000.

However, it failed to move higher as the daily chart printed a green candle with two long wicks on either side. To sum up, the area between $40,000 and the 50-day SMA is the key area of ​​resistance right now.

If the price breaks this zone, the next key level to watch is the area between $46,000 and the 100-day SMA. On the upside, there will be a retest of $36,000 support if the price rejects.

Onchain analysis

After bitcoin rallied and touched its previous high of $44,000 mid-month this month, it was rejected and started another downtrend that sent open interest lower.

Last Thursday, Bitcoin experienced tremendous price volatility, resulting in a massive LONG/SHORT liquidation. This liquidation is necessary for the market to reduce the high leverage contracts used in the futures market.

After the price movement, the estimated leverage and open interests have decreased. Open interest has hovered around multi-month lows, increasing the likelihood that Bitcoin will continue its uptrend. However, the market’s estimated leverage ratio has not fallen as much as open interest, suggesting that large liquidations could continue in the medium term.

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