For the first time in eight months since July 2017, Bitcoin has recorded a green monthly candle on its 1-month price chart.
In technical analysis, a green monthly candle materializes when the price of an asset, in this case, Bitcoin, ends the month higher than its price at the beginning of the month.
On February 1, Bitcoin opened its monthly candle at $3,413. On February 28, the dominant cryptocurrency closed the candle at $3,791, up more than $300.
Is it an Indicator of Bitcoin Accumulation?
On Thursday, CCN.com reported that Square, the $33.59 billion payments giant operated by Twitter CEO Jack Dorsey, processed $52.4 million in Bitcoin purchases in the last quarter of 2018.
The settlement of over $166 million in Bitcoin sales by Square and the inflow of over $359.5 million into Grayscale’s cryptocurrency investment vehicles have shown a gradual increase in both retail and institutional demand for Bitcoin throughout the past several months.
While analysts remain cautiously optimistic in the price trend of Bitcoin and expect several months of consolidation before it begins to demonstrate a strong price movement, the sentiment in the cryptocurrency market has noticeably improved in recent months.
One trader said:
BTC monthly is about to close as a bullish engulfing on volume increase, the first green monthly candle since July 2018.
Bulls did it. Leaning bullish above green monthly block [$3,400 to $3,550].
Bitcoin and the rest of the cryptocurrency market are still deep in a 15-month bear market and until key resistance levels are broken, a low level of volatility in a low price range is expected.
Some traders including former International Monetary Fund (IMF) economist Mark Dow have said that until Bitcoin reaches the $5,000 to $6,000 range, it remains highly vulnerable.
Economist Alex Krüger told CCN.com in an interview on February 25 that as Bitcoin tested an important resistance level at $4,200, it struggled to show strength and a short-term correction followed.
As such, although Bitcoin recorded its first positive monthly price movement since July 2017, it still has major hurdles to overcome on the technical side to initiate a proper accumulation phase.
In the near-term, BTC would have to demonstrate a clean breakout above the $4,000 to $4,200 range to escape the tight range it has been in for over 3 months.
“It is a simple stops run. Prices had just gone up vertically for 16 days without a pullback. Take $ETH for example: +38% without a pullback. Lots of levered longs piled up. And people FOMOed in. BTC reached the first level strong resistance ($4200) and a correction ensued,” Krüger told CCN.com.
But, not all analysts remain convinced that BTC established a proper bottom at $3,122 in December of last year.
Tokens Recording Massive Gains
As Bitcoin slightly recovered to $3,800, tokens in the likes of Binance Coin, ICON, Huobi Token, Steem, Theta, and Aion have recorded gains in the range of 7 to 20 percent against both BTC and the USD in the last 24 hours.
Binance Coin and ICON, in particular, have shown strong momentum throughout the past month, most likely due to the initiatives the two projects have been leading.
As the blockchain partner of the government of Seoul, South Korea, the ICON team has been cooperating with the government to create a wide range of blockchain applications to process administrative tasks of government agencies.
Binance has shown progress with the launch of its decentralized exchange (DEX) and has recently given out $100,000 in Binance Coin to users to test the Binance DEX testnet.
The relatively strong price movements of tokens and small market cap cryptocurrencies have shown that existing investors in the cryptocurrency remain confident in the mid-term growth of the sector.
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Last modified: March 4, 2021 2:54 PM