Bitcoin was overdue for a snapback, and it now appears to be in full swing.
The cryptocurrency rebounded strongly, hitting $ 39,000 on Monday, up 13.5% in 24 hours. Other cryptocurrencies were also up, with Ethereum up 10% to $ 2,359 and Dogecoin up 11.4% to $ 0.2195.
(ticker: TSLA) PDG Elon Musk et
(SQ) CEO Jack Dorsey spoke about it last week, with Cathie Wood, head of ARK Invest.
Monday’s big move may also have been sparked by reports that
(AMZN) is about to enter crypto.
recently posted a job for a digital currency expert, claiming in the description that the person “will own the vision and strategy for Amazon’s digital currency and blockchain strategy.” Amazon can also launch its own “stablecoin” or a digital token linked to a hard currency like the dollar.
“Despite our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” the company said in a statement to Barron. “We remain focused on exploring what this might look like for customers buying from Amazon. “
Despite persistent negative pressures, including increased regulation in the United States and abroad, and growing criticism of Bitcoin’s carbon footprint, the currency’s latest move is a good sign, some technical analysts say.
Bitcoin has now cleared its 50-day moving average and is up for the sixth day in a row, reflecting positive near-term momentum. The price breakout places the next level of resistance between $ 42,000 and $ 43,000, said Katie Stockton, founder and managing partner of Fairlead Strategies, a crypto technical research firm.
“I don’t think it will be difficult for Bitcoin to go above $ 42,000 because it’s not a major level,” she said. “If that level is broken, the next resistance level is $ 51,000. ”
Bitcoin was ready to jump after briefly dropping below support levels of around $ 30,000, she added. The gambling spirit around this level kept the price in a narrow range as bearish and bullish traders clashed.
But the Bulls appear to have won the day, supported in part by upbeat comments from Musk and Dorsey, as well as technical factors.
Technical indicators point to more gains as Bitcoin was in a “coil spring” formation which typically leads to price spikes, Stockton said. “Our belief is that spring will be on the rise because the long term trend is still intact. The corrective phase was not a bearish reversal.
Martin Gaspar, research analyst for crypto-markets firm Crosstower, also sees momentum building. If Amazon announces that it will accept payments in Bitcoin, or at least facilitate payments for its merchants, that would be another sign of mainstream validation for crypto, he said.
And a recent wave of short betting may be waning. Over $ 1 billion worth of Bitcoin has been liquidated in the past 24 hours as bearish investors who had borrowed Bitcoin or derivatives sold their positions to meet margin requirements, he said. It was a classic “short squeeze” that helped drive up the price.
Traders have also had to pay higher borrowing costs to bet against Bitcoin lately, indicating that bearish sentiment may have peaked. And Bitcoin held by stock market investors is pouring in, a sign that traders may be depleting the asset.
“Investors buy and pull out of the stock exchanges,” Gaspar said. ” It’s a good sign. Long-term holders see this range of $ 30,000 to $ 40,000 as attractive prices for Bitcoin. “
Bitcoin’s recent gains could easily be reversed with a choice comment from a financial regulator or a tweet from an influencer like Musk, who has played with it on several occasions. Traders should enjoy the gains as long as they last.
Fixes and Amplifications: Martin Gaspar is a research analyst for crypto-market firm Crosstower. An earlier version of this article misspelled his name.
Write to Daren Fonda at [email protected]