Bitcoin Rallies Past Key Resistance as Analysts Weigh New Bull Market
- Analysts say Bitcoin’s latest surge has several traits commonly associated with market bottoms, including rapid price gains and large short liquidations, though macroeconomic risks have not disappeared.
- Bitcoin has built strong momentum in recent sessions, said Mati Greenspan, former senior market analyst at eToro and founder of Quantum Economics.
- Greenspan said the current setup looks similar to previous market-bottom patterns, which often begin with a short squeeze and a large upward move before breaking through key technical levels. As momentum builds, traders who had been waiting for Bitcoin to fall toward $40,000 can quickly switch to buying as FOMO takes over.
- Greenspan acknowledged that another correction remains possible but said he would not rely on that scenario. He believes a strong recovery can quickly push sidelined investors back into the market.
- Jason Fernandes, a market analyst and co-founder of AdLunam, urged investors not to declare victory too soon. He said the bear market may not be over unless spot Bitcoin ETF inflows remain consistent and there is clearer evidence of easing monetary conditions.
- Fernandes warned that BTC could lose momentum around major resistance zones. Bitcoin briefly reached $79,200 on Friday before pulling back toward $77,500.
- Greenspan remained more optimistic, saying the current market structure looks familiar and that the likelihood of a major pullback appears limited for now.
- He pointed to several developments that could support further gains, including White House discussions surrounding Bitcoin Treasury plans, congressional work on crypto market-structure legislation, and efforts by the SEC and CFTC to provide greater regulatory clarity.
- Fernandes also credited the macro backdrop. He highlighted the Treasury’s decision to double its bond-buyback size to $4 billion, which helped lower longer-term yields and strengthen demand for risk assets.
- Bitcoin’s extended consolidation below the $64,000-$66,000 range had also allowed traders to accumulate sizable short positions, Fernandes said.
- The breakout forced many of those traders to close their positions, triggering cascading liquidations and accelerating the upward move. Bitcoin’s breaks above $66,000 and its 200-day moving average also attracted algorithmic trend-following buyers.
- Adam Morgan McCarthy, lead researcher at London-based digital-asset liquidity and market-data firm LO:TECH, said the market mechanics point strongly to a short squeeze.
- He noted that more than half of Bitcoin’s 7.1% gain on Wednesday occurred during one hour, even though that period represented only about one-third of the day’s trading volume. Such concentrated activity is a typical sign of forced short covering.
- McCarthy contrasted Bitcoin’s performance with gold, which also rallied after Treasury announced larger bond purchases but did so without the forced buying that amplified Bitcoin’s move.
- In his view, gold offers a clearer signal of investors seeking protection from inflation and currency weakness, while Bitcoin’s latest gains have been more heavily influenced by derivatives positioning.
- Tobias Bauer, co-founder of TBV, highlighted another warning sign: Binance recorded roughly $1.26 billion in Bitcoin futures trading within a single 60-second period, about 361 times its typical one-minute volume.
- With funding rates approaching exchange limits, Bauer said the market is becoming increasingly one-sided. Holding leveraged long positions at these levels is therefore becoming more expensive and could leave traders vulnerable if the rally reverses.
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