8.5 C
October 3, 2022
Image default

Bitcoin leaves the crucial 4-day interval: what happens next?

Expectation of a major correction appears to have been dashed, at least for now

Bitcoin’s price has exceeded its 4-day range, exceeding the critical $ 33,800 technical resistance level. This upward movement is important because it sets the BTC up for a potential $ 40,000 resistance area retest.

The price of Bitcoin. Source: BTCUSD at TradingView

$ 37,800 is the biggest hurdle before $ 40,000 for Bitcoin

Technically, Bitcoin has to break through the $ 37,800 level to potentially rise to the $ 40,000 to $ 42,000 range once again.

Bitcoin has been consolidated for a much longer period than many expected. But if the momentum of BTC increases again, the long period of consolidation may allow the recovery of BTC to gain strength.

At the top of the favorable technical framework, several macro and fundamental factors could further boost BTC momentum in the foreseeable future.

For example, Rafael Schultze-Kraft, CTO at Glassnode, said that about $ 70 billion in capital had flown to Bitcoin in the past 30 days. Monthly capital inflows are greater than Bitcoin’s market capitalization in September 2017. He wrote:

“The total amount of capital inflows in #Bitcoin in the last 30 days (as estimated by the realized limit) is as high as the market value of $ BTC in September 2017 and early 2019: ~ $ 70 billion dollars.”

Consistently high capital inflows into Bitcoin are critical to sustaining the upward momentum of BTC.

In previous bullish trends, such as the BTC’s hike to $ 14,000 in 2019, the hikes were mainly driven by the over-leveraged futures market.

While this has allowed Bitcoin to recover quickly in a short period of time, it has made BTC vulnerable to extreme corrections.

The over-leveraged nature of the Bitcoin market was one of the main reasons why it dropped to less than $ 4,000 on March 12, in the infamous crash.

The increase in equity and driven by the institutional investor makes the current upward trend of BTC more stable, which is why BTC has not seen corrections of 35% to 40% in recent months, in contrast to previous cycles.

Tyler Winklevoss, the CEO of Gemini and the billionaire cryptocurrency investor, said he spoke to a large number of hedge fund managers about Bitcoin.

The combination of favorable macro statistics and the institutions’ genuine increase in Bitcoin appetite has placed BTC in a privileged position for a recovery. Winklevoss said:

“The number of hedge fund managers and investors I’ve been talking to lately about #Bitcoin has never been greater. Even the most conservative of them are concerned about the future of the US dollar. They all want to learn how to stack sats to protect their funds and themselves. ”

What is the next step?

In the short term, there are four main resistance levels: $ 36,630, $ 37,800, $ 40,000, $ 42,000.

The BTC price is more likely to retest $ 36,630 in the foreseeable future and then move to $ 37,800. The last level is an area of ​​greater resistance, so that the BTC could face a settlement at that level, as it remains the last obstacle towards the previous high.

Bitcoin, currently ranked first by market cap, has risen 6.26% in the past 24 hours. BTC has a market capitalization of $ 639.5 billion with a 24-hour volume of $ 63.64 billion.

Source: CryptoSlate

Related posts

The “mystery” of virtual currency/bitcoin approaches the background of increasing USDT issuance = Sino Capital

Aparnna Hajirnis

Bitcoin broke $ 14,000. To the moon. What about Ethereum and cryptocurrencies? –

Aparnna Hajirnis

Inflation is falling … but are you sure? – Blocksats

Aparnna Hajirnis

Leave a Comment