The past 24 hours have been explosive for the Bitcoin market. Ever since breaking past $7,800 on Wednesday morning, the cryptocurrency has been in a nearly unstoppable uptrend, rallying past resistance after resistance in the $7,000s, $8,000s, then most recently, the ever-important $9,000 level.
This steep uptrend comes on the back of an influx of buying volume on retail exchanges such as Coinbase, which temporarily crashed on Wednesday due to the influx of buying activity. Binance, too, saw an influx of volume, with the exchange registering $11 billion worth of trading activity in 24 hours.
Just minutes ago as of the time of this article’s writing, BTC has hit $9,200 — more than 17% higher than it was just 24 hours ago.
This is the highest the cryptocurrency has traded since the first week of March, just prior to the capitulation event that took Bitcoin to $3,700.
Chart from TradingView.com
Although few shorts were liquidated during this latest leg higher from $8,800 to $9,200, Skew.com data indicates that the past 24 hours have seen more than $90 million worth of BitMEX shorts liquidated.
It’s a stunning trend that shows that few investors expected Bitcoin to rally so high and so fast.
What Comes Next for Bitcoin?
With few investors expecting the cryptocurrency to rally so quickly, they have looked to technical analysis to try and determine what comes next for Bitcoin.
One crypto trader remarked that with Bitcoin breaking past the $7,800-8,000 resistance cluster, which he called the point at which bears will have their “last stand,” the chance at upside has grown dramatically.
Bloomberg, on the other hand, is warning of an imminent correction.
The outlet warned in an article published when Bitcoin was trading in the mid-$8,000s that the GTI Global Strength Indicator — a measure tracking an asset’s trend — recently printed a reading of over 70 for Bitcoin.
Chart from Bloomberg
With a reading of “70” coinciding with the point at which assets become technically overbought, Bloomberg warned that “it may be difficult for the token to notch additional gains in the short-run.”
Factors Behind This Explosive Move
It’s hard to tell exactly what the collective crypto diaspora is thinking, but analysts say that the recent price action can be attributed to fundamental trends.
Roch Rosenblum, the co-head of trading at GSR, remarked to Bloomberg in the aforementioned article that the ongoing BTC rally is predicated on the macroeconomic environment:
“This latest run past $8,000 is as much about positive macro sentiment as it is about the upcoming halving. We’re starting to have a lot more certainty, as more countries begin to share their plans to reopen the economy in May.”
This optimism was echoed by Zac Prince, a co-founder of BlockFi, who said that the “current market dynamics are driving a bolstered interest [for] digital currency.” These dynamics he was referencing was the Federal Reserve’s commitment to money printing and the growth in stablecoins.
Photo by vikram sundaramoorthy on Unsplash
