Within nine minutes, the price of Bitcoin rose from $ 3,625 to $ 3,900, by 7.5%. Other cryptographic activities such as Ethereum (ETH) followed, with a 13% increase from the day's minimum.
Although Bitcoin and the rest of the crypto market have only returned to Thursday levels, the trend reversal of the short-term trend of cryptographic activities has led operators to regain confidence in the market.
In the grand scheme of things, the increase in the price of Bitcoin from $ 3000 to $ 4,000 will realistically have a minimal or no impact on the short-term trend of the dominant cryptocurrency. But, in a period of uncertainty and doubt, minor manifestations can trigger declining investor confidence.
Bitcoin and Ethereum Sustain Momentum?
Many analysts said during the past week that as long as Bitcoin will not come out of the higher resistance levels between $ 5,000 and $ 6,000, a mid-term turnaround can not be confirmed.
Mark Dow, a trader who cut Bitcoin from his all-time high to $ 19,500 up to $ 3,500, went so far as to say that the inability of the asset to recover over $ 6,000 could lead to a further decline in BTCs below $ 3,120. , its annual low.
Wild volatility is expected in a low price range until the cryptocurrency establishes a strong fund and will gradually recover in the coming months.
However, the sharp recovery from the low levels under the sign of $ 4000 indicates that investors generally consider the range from $ 3,000 to $ 3,500 as the fund of assets and are investing substantial capital for around $ 3,500 to accumulate the asset.
Su Zhu, the chief executive officer of a FX hedge fund, has previously noted that a large buying wall has been set at $ 3.30 by Bitcoin investors on important fiat-to-crypto exchanges such as Coinbase and Bitstamp.
The investor said on December 13:
10% less from here ($ 3,300), the wall buy on @Coinbase is now the biggest (BTC) since mid-2015. Similar to Bitstamp. To break down you will need to fill these offers supported by the fiat. Or 1) plus BTC borrow to enter online 2) KYC-able off-ramp sale. The sale of derivatives will only lead to loans that become very negative as it was.
The $ 3,300 buy-wall prevented the asset from falling to its annual low, setting a strong level of support in the low-end region of $ 3,000.
What investors can expect
Surely there is a possibility that Bitcoin will set a new annual minimum and some analysts have suggested a potential reduction in assets to $ 2,000.
But in the short term, a high volatility rate is expected in the range of $ 3,500 to $ 4,500, provided that the business does not exceed the resistance levels in the high $ 5,000 region, which could result in a # 39; correct trend reversal.
Currently, the volume of the cryptocurrency market remains relatively low, which could prevent a promising rally of more than $ 5,000 per Bitcoin. The volume of the encrypted market is around $ 15 billion, down $ 5 billion since mid-December.
Shutterstock foreground image. Price charts from TradingView.
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