1-hour candlestick chart of BTC/USD (Bitstamp). Source: View of the shop
Being a bear is expensive
Cointelegraph Markets Pro and TradingView showed a sudden rise that took BTC/USD out of the $50,000 corridor Friday night.
This move has been coming for weeks – a convincing attack on the $60,000 resistance, the last before the all-time highs, has yet to materialize.
Bitcoin becomes bitcoin. ⤴️ $BTC pic.twitter.com/8IY19LdtmB
– Alex Saunders (@AlexSaundersAU) April 7, 2021
Today, however, things seem to be different: Bitcoin will miss the $61,000 mark and then consolidate around $60,650 at the time of writing this article.
Short positions in bitcoin closed at $163,745,606 in an hour, noted quant analyst Lex Moskow on Twitter as the market wobbled.
While bitcoin is on its way to another ATH. Being a bear is expensive.
The picture was truly startling to traders who had been in a sideways market for weeks that occasionally hit multi-week lows.
The reason for the recent outbreak was not yet clear on Saturday, nor was the true extent of its resilience.
One of the notable changes involved the refinancing rate on all exchanges, which had fallen significantly in the previous days, causing friction at $60,000 and above, and then rising sharply as the market moved higher.
Bitcoin rate. Source: Bybt
No indication of a peak market
Still, some have argued for optimistic market sentiment this week. Among them, Filbfilb, co-founder of trading complex Decentrader, explained that the $58,000 bitcoin technically has a lot in common with the $20,000 bitcoin.
Above 58K, I’m still very bullish. The structure is the same as 20K IMO, many other nuances of the market, similar in order and depth, he told subscribers on his Telegram trading channel on Friday.
A day earlier, Philip Swift, an analyst at Decentrader, had made similar comments. He used the impending crossover of two key moving averages to suggest that BTC/USD should have risen further.
These were the 111-day and 350-day moving averages, the latter multiplied by two, collectively known as the P-cycle.
My current short-term outlook for the bitcoin market is neutral to bullish, so there is a good chance in my personal opinion that it will not be the top of the market cycle for bitcoin when the Pi Cycle moving averages cross in a few days, Swift writes in his market update.
Other indicators and fundamentals suggest that we are not yet at the end of a market cycle.
Others agreed, but were slightly more cautious, including statistician Willie Wu, who warned Friday that bitcoin could end up with the first of a double top price formation.
Volatility is much lower than in this cycle, he summarized, adding that it is unlikely that the $1 trillion market capitalization threshold – which corresponds to bitcoin’s price of about $53,600 – will be crossed once it is.
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