Bitcoin’s price has been above the psychological 5k level for the best part of 12 days already. The trading week was thunderous, but the world’s premier cryptocurrency managed to keep itself about that key magical number.
The price kept increasing for almost all week. It went as high as USD 5450 on Wednesday before it went back to USD 5.000,00 according to CoinDesk data, but most exchanges saw the same market behavior Then, on the next day, it dropped to USD 4.894,00 in a somehow dramatic swing.
However, Thursday’s bear attack wasn’t enough to break the bull’s backs, and the price recovered going above 5k again, and it’s remained there ever since.
Analysts are invoking market dynamics, as illustrated by technical analysis to explain those price fluctuations.
Rising Trend
The research team members at SFOX highlighted the upwards trend in Bitcoin prices we’ve seen for most of the current month. They identify the prevailing market sentiment’s origin in a 20k BTC order placed last April 2nd. This order was distributed over three different exchanges, and it supposedly came out of an Asian investor because of timing.
While nobody knows yet who placed the buying order, the posture itself has gained legendary status in less than a fortnight. It threw “supply and demand out of equilibrium” and triggered big wins.
“This rally was highly publicized in the media, which could have theoretically caused people to experience some ‘FOMO,'” according to the same team.
Technical Analysis
CryptoPatterns’ publisher, Jon Pearlstone, had something to say on the coins dramatic change in trends. In his view, it was all about technical analysis.
He explained,
“Bitcoin broke out of a bullish pattern above $5000, did not see any meaningful buying follow through around $5400, and has now pulled back to test the current key support level of $5000.”
“This is very typical price action during a bullish cycle,” he stressed, then continued by saying that “price action continues to favor the bullish path even though we’ve pulled back,” with the next “likely target” being $6,000.
But he also clarified that in case the digital asset goes underneath a particular level with high levels of trading volume, then it could report losses. Jon stated,
“A drop under $4750 with increasing volume would be the indicator to watch for that ‘something else may be going on’ versus typical bull cycle moves.”
So where do we stand? Is the 16 month-old bearish run finally behind us? Is the long and disastrous crypto winter over at last? It’s too soon to tell for sure. A good thumb-rule when construing events in any financial market is not to see things in a way that would be more convenient for you. That’s how you allow cognitive biases to cloud your judgment and that’s one of the most reliable ways to lose your money.
It seems that the current Bitcoin environment is reacting to that substantial buying order that changed everything (at least for the last 12 days). But the increments in price are not as ample as we’ve seen in previous genuine bull-runs so the chances are that the current bullish run is transient, and the market will correct itself over the next few days or weeks until the following (the real) bullish run comes around.
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.