Despite the fact that Bitcoin (BTC) was rejected at $45,500, the hope of another substantial advance in the cryptocurrency market has resurfaced. The bulls are now aiming to strengthen their defense at the $43,000 support level.
According to TradingView data, after reaching a weekly high of $45,500 early on Feb 8, bears were able to push Bitcoin price down to $42,900 during afternoon trading as investors took profits and prepared to make offers of $38,000. At the time of writing, the pioneer token is worth $44,091.
Bitcoin stabilizes at $44k
Bitcoin (BTC) bulls have successfully pushed the price of the major digital currency back to the $44K support level, buoyed by encouraging developments. Notably, the Canadian subsidiary of major accounting firm KPMG recently announced that it has integrated BTC and ETH into its corporate treasury. Additionally, Tesla Inc reported in a recently filed 10-K that it owned nearly $2 billion worth of BTC at the end of last year.
The rapid rise surprised many traders as headlines in the crypto community predicted the start of a protracted bear market, but those gloomy predictions may have been premature, according to data from recent Glassnode research. According to the blockchain research company, “Prices have bounced off a number of fundamental levels that have historically signaled an undervaluation or “fair value” price.
The founder and CEO of multi-strategy firm Banz Capital, John Iadeluca, commented on this trend, saying:
“Tesla’s 10K SEC filing update was released yesterday, reaffirming notions that Tesla held on to its BTC holdings amid Bitcoin price drops to the lowest 30k. Combined with the news that KPMG Canada added Bitcoin to its balance sheet, it encouraged a sharp rise in positive Bitcoin price sentiment.”
Bitcoin futures open interest daily exchange. Source: Glassnode
Glassnode noted that during previous instances of severe price losses, futures open interest (OI) experienced large drawdowns or “deleveraging events,” as evidenced by the large red spikes to the downside in the chart above, a feature that is surprisingly low. absent in this recent price drop The firm said:
“This may indicate that the probability of a short contraction is lower than initially estimated, or that such an event is still possible if the market continues to rise, reaching clusters of short-seller liquidation/stop-loss levels. “.
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Bitcoin in the longest rally
Bitcoin’s new rally is BTC’s longest streak since last September. After the recent crash, investing in several of these risky asset groups has become considerably more comfortable.
While the market is not out of the woods yet, there is still a lot of uncertainty on several fronts, including how quickly the Federal Reserve can move to combat rising inflation.
Meanwhile, veteran traders, particularly the pseudonymous Twitter user Pentoshi, are jumping at the chance. This includes collecting some profits and repositioning yourself for what the future holds. Pentoshi put it this way:
“Taking the last highs now. Looking for one last raise, but $44,000–$46,300. In my opinion, it is a good place to close long positions and re-evaluate.”
BTC/USD trades $44k. Source: TradingView
Despite BTC’s increased sense of optimism in terms of prices, some traders remain bearish on the top cryptocurrency. Allen Au, a Bitcoin expert and Twitter user, shared a chart showing the impact of the latest price action on the futures markets. Following a drop in open interest, there was a $71 million sell-off of Bitcoin shorts. Au described this as a “short squeeze” that is sure to continue to promote price increases. Furthermore, he stated:
“Perpetual futures funding rates negative even though BTC topped $44K. Traders remain bearish on BTC.”
Related article | As Bitcoin Price Surpasses $40k, Tesla Reveals Holdings Touched $2 Billion
Featured Image from iStockPhoto, Charts from TradingView.com
This post Bitcoin Flips $44k to Support, Bulls in Longest Rally Since September
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