By CCN.com: In the past month, the bitcoin price has climbed 23 percent against the U.S. dollar in major markets, recording nearly a 70 percent year-to-date (YTD) gain.
The bitcoin price has almost fully recovered to November 2018 levels as it surged past $6,300 with strong volume and momentum.
Since March, the real volume of bitcoin calculated using the methodology of Bitwise Asset Management has surged by three-fold from $270 million to over $700 million, indicating an increase in interest towards the dominant cryptocurrency.
Last week, global markets analyst Alex Krüger noted that if bitcoin surpasses $6,400, the most traded price of 2018, it would confirm the start to a new bull market.
The bitcoin price has surged by nearly 10 percent in the past week and despite various optimistic technical indicators, for the asset to climb above key levels it would need solid catalysts that could act as stimuli for near-term growth.
Some analysts like David Puell, the head of research at Adaptive Capital, have said that shorts of bitcoin are far from being liquidated and squeezed.
A short squeeze could serve as a potential stimulus for the bitcoin price, especially if the volume of shorts increase in upcoming days out of caution from traders that the $6,400 resistance level may be too big for the asset to overcome.
“Price is not only parabolic but vertical now. Shorts are still far from getting fully squeezed. $6.4k may activate longs from late trend traders, setting up the perfect blow-off top. Blue: pullback targets after this potential climactic top from who knows where,” Puell said.
While the Bitfinex-Tether scandal, in which the Office of the New York Attorney General alleged Bitfinex of misusing $900 million of Tether’s cash reserves, led to a substantial increase in the premium of BTC on Bitfinex that may have led the price to climb, the premium of BTC on the exchange has declined in the past few days.
Had the disproportional premium of BTC on Bitfinex continued to exist, it could have largely affected the stability of the crypto market and raised serious concerns on the sustainability of the market’s short-term movement.
As explained by Yassine Elmandjra, a crypto asset analyst at ARK Invest, bitcoin has outperformed every top 10 crypto asset in the past month.
“On a day where everything is bleeding red except Bitcoin, let us be reminded that Bitcoin has continued to outperform every coin in the top 10 over the last month. On average, the top 10 coins by market cap are down more than 30% against Bitcoin,” Elmandjra said.
Previously, investors like Multicoin Capital general partner Vinny Lingham said that crypto assets would have to show independent price movements to sustain the momentum of the market.
“Many people believe that the crypto winter is over. Here are some of my unfiltered thoughts on this topic. Charts & technicals aside, I don’t believe this rally is sustainable for one reason: The market has not yet decoupled the various crypto assets from Bitcoin,” Lingham said in April.
The decoupling of crypto assets since last month suggests that the market as a whole is no longer engaging in a downside movement, possibly as the confidence of investors rekindles in the near-term.
It remains to be seen whether BTC could hold its price at important resistance levels even with the ongoing Bitfinex-Tether controversy, a scandal which some have argued has the potential to become the biggest intervention of the crypto market in history.
Last modified: March 4, 2021 2:45 PM