Bitcoin (BTC) hit $43,500 yesterday morning after a stunning almost 15% gain from $38,000. The price then initially dropped to $43,000, but Bitcoin then jumped back up from there.
Bitcoin Price Rise Slows Down
Yesterday afternoon, the price of bitcoin on various cryptocurrency exchanges reached almost $44,900. That was the highest price since Bitcoin lost its grip on $44,000 two weeks ago. Still, the resistance was still too strong and Bitcoin subsequently fell back to $43,400.
Despite this, bitcoin was still in an uptrend but slowed down considerably. Bitcoin was then able to rally slightly, but it already found too much resistance around $44,500 last night. The price then made small swings and was rejected again around the same price.
This morning, bitcoin briefly fell to $43,800 and currently sits at $43,900 on Binance and $39,600 on Bitvavo at the time of writing.
Confidence returns as a safe haven
After weeks of growing fear and uncertainty in the cryptocurrency market due to macroeconomic developments, confidence finally appears to be returning. Perhaps that means that part of the fear was already discounted. The situation in Ukraine caused, as in March 2020, the status of bitcoin as a safe haven to be questioned. In recent days, it seems to be slowly regaining this status. However, it is possible that the situation in Ukraine will deteriorate further and then Bitcoin will be included.
Volumes in Ukraine and Russia are increasing
However, the growing confidence that the demand for bitcoin is finally rising again and the volume is increasing. We are seeing significant spikes in volumes, especially in the Ukraine and Russia. The story that Russian oligarchs are behind this is unlikely. Demand appears to be mostly spot driven, which is healthier for the market compared to the sheer number of buyers. lung positions that have been closed in recent months.
Activity on Binance suggests that both Ukrainians and Russians are looking to crypto as a safe haven for their savings as the ravages of war and capital controls intensify.
Read more here: https://t.co/IFHeB0bgxG pic.twitter.com/Yffu26UsLe
— Arcane Research (@ArcaneResearch) March 2, 2022
Not the whales that hoard
There is also a story that the whales are massing again, but according to Rafael Schultze-Kraft of analytics company Glassnode that is not true. This time it is mainly the smaller investors who are accumulating. However, the whales are changing and that can lead to selling pressure.
The spike in addresses holding more than 1,000 BTC is a result of the WBTC custodian transferring reserves to a bunch of newly created addresses.
– Rafael Schultze-Kraft (@n3ocortex) March 1, 2022
The market is also talking about a potential “decoupling” between bitcoin and more traditional risk asset markets. Although the correlation is currently declining sharply and Bitcoin is regaining its safe haven status, it may be too early to talk about a real decoupling.
Yesterday, all eyes were on the opening of the Moscow Stock Exchange, or MOEX, which was delayed by several hours. In the end, however, the MOEX remained completely closed and the doors remain closed today.
Bitcoin in orange, Nasdaq in blue pic.twitter.com/pbqz1UYEXe
— Will Clemente (@WClementeIII) March 1, 2022
Possibly a lot of resistance.
Despite the growing confidence in bitcoin, further escalation in Ukraine could still cause a lot of panic and selling pressure. Investors also remain concerned about the upcoming Federal Reserve policy.
With bitcoin still struggling to break above $45,000, several analysts are starting to talk about a possible correction before the price rises again. Between $44,000 and $46,000, there is considerable resistance, which could mean that we will see a retest of the $40,000 to $43,000 area before the price breaks out. Meanwhile, analysts are also talking about a possible double bottom, a bullish sign.
Sellers enter at $44.4k
To successfully break one must Absorb Liquidity, now one level higher.
In a bullish structure when liquidity is absorbed, the price gains a level and reestablishes the former Resistance region as Support.
In the current case, $40,800 is that support. pic.twitter.com/g5xHRfil2q
– Gaah (@gaah_im) March 1, 2022
It appears that a potential double bottom is brewing for BTC and related stocks. pic.twitter.com/gzbVqdG7Pg
— Jurrien Timmer (@TimmerFidelity) March 1, 2022