Bitcoin’s recent rise has sparked new hopes for BTC just in time for the holidays. Here are several signs that may indicate a Santa Claus rally is on its way.
Bitcoin has been anything but bullish recently. Since it’s tantalizing reprisal back in June, the pioneer crypto has refused to advance anywhere but south, retracing by as much as 47%.
Rather than any technical or a fundamental issue, many are blaming the price lull on the PlusToken scam. According to a report by bitcoin analytics firm, Arcane research, the $3 billion Ponzi recently cashed out $34 million via Huobi, causing BTC to landslide down into the $7,000 region.
Nevertheless, on Dec. 18, bitcoin exploded, producing one of the first bouts of positive volatility in over a month. Witnessing an approximate 15% move up BTC provided a hefty dose of hopium. But it isn’t just price action supporting further movement.
If we’re lucky, bitcoin could be about to grant an early Christmas present. Here are four bullish signs of an imminent revival.
Currently, the fear and greed index – a measure of sentiment within the crypto sphere – is reading “Extreme Fear.” Now, admittedly, that doesn’t sound the cheeriest of news, and technically, it isn’t; but there is an upside.
The index gathers various sentiment indicators such as volatility, trading volume, social media posts, and Google trends. Right now, the index is reading 21, slamming its dial to ‘Extreme Fear.” While this symbolizes that traders are worried about a further dip, such a low reading has also been indicative of a bitcoin bottom in the past.
Historically, reaching levels of exaggerated fear has led savvy investors to counter trade the weak sentiment and buy the blood.
Another bullish catalyst for growth is the swelling of long positions on Bitfinex.
According to Arcane research, long positions on the platform have been building since late November, amounting to a massive 45,000 open long positions on Dec. 17 – a record for Bitfinex. Conversely, open short positions were just over 8,500.
While the report indicated the possibility of a long squeeze – which has previously coincided with long liquidations – in reality, the opposite ensued, with many longs realizing their positions as bitcoin ran up.
Researchers provided two possible theories for this uptick in longs, suggesting that it was either “someone hedging, and opening their short positions on another platform,” or potentially, the prospect that Bitfinex traders are “long-term optimistic, and view the current price drop as a buying opportunity.”
This has been a week of breaking records for crypto firms. Bakkt is the latest to boast a new ATH. While actual volume was down by -7.6% compared to the week prior, open interest has soared to 1,020 this week.
Incredibly, earlier today, Bakkt came through yet again, relaying another record-breaking day – this time, citing actual volume.
A monumental $47.30 million exchanged hands on the platform Wednesday, revealing that institutional interest hasn’t dissipated.
Tracking the short term price action of BTC isn’t only depressing, it’s also fairly futile, especially if you’re a long term holder. Contrarily, looking at the bigger picture may just provide enough hopium to get you through the tough times.
As per the Arcane research report, an ascending channel that has been forming since 2014 indicates that BTC may have just hit—or is close to hitting—a bottom.
According to the researchers, If this channel holds, bitcoin could be in for a price of “around $100,000 -$200,000 during the next bull run.”
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Last modified: January 22, 2020 11:40 PM UTC