Buy Pressure “In the Area of ​​the Bull Market” — 5 Things You Should Know About Bitcoin This Week

Bitcoin (BTC) begins with great success after returning to an annual opening price of over $ 46,000 in the last week of March.

With a surprisingly strong uptrend over the weekend, BTC / USD began to rise on Saturday and continued overnight to challenge its highs from the beginning of 2022.

Bitcoin’s strength has been naturally deprived by this month’s salt pinch, in the face of the ongoing macro environment with considerable uncertainty. The reaction is understandable given that all previous attempts to get out of the trading range of those months have failed.

Despite periods of instability, the Bulls have always remained disappointed, and Bitcoin has not only turned around since then, but often revisited the lower bounds of its range, costing both short and long positions. I did.

Nevertheless, this time it is expected to be different in reality. Analysts have long argued that a breakout that exceeds the upper limit of the range formed by the annual open at around $ 46,200 is sufficient to trigger a paradigm shift.

As this is done on the chart, attention is focused on the last hurdle — solidifying resistance levels in these months as support.

In an ongoing process on Monday, Cointelegraph will look at potential triggers that could create or break this important episode of Bitcoin price behavior.

Bitcoin wipes out the 2022 dip

“Gradually and suddenly” or a pure chance? Traders are again trying to understand the new strengths of Bitcoin this week.

It hasn’t been seen on the chart since the New Year — BTC / USD has returned to $ 47,000. After jumping to almost $ 3,000 in 24 hours, the largest cryptocurrencies hit resistance levels firmly.

The importance of $ 46,000 has been a hot topic for almost as long. Many have said that returning to the annual open signals that Bitcoin is ready for the big ones again.

However, few would have thought that this phenomenon would occur “overtime.” But as the week begins, suspicions about the true strength of the rally naturally permeate social media, just as it did when the rally itself began.

Nevertheless, even more cautious voices no longer underestimate the possibility of further rises, even though the longer-term prognosis remains downhill.

“Basic buying pressure on Bitcoin has now risen to the territory of the bull market,” said analyst and statistician Willy Wu. report..

Meanwhile, Matthew Highland, a key supporter of the $ 46,000 debate, has set a $ 52,000 target as the next long-term analyst resistance barrier.

In a Twitter post, he Added Prior to this move, a breakout of the Bitcoin Relative Strength Index (RSI) indicator occurred. This is the classic signal of a breakout trend.

The RSI evaluates overbought or oversold assets at a particular price. For Bitcoin, its score has risen from the floor level since mid-January. Data from Cointelegraph Markets Pro and TradingView show.

Therefore, further development of the RSI may determine the scope of the meeting in accordance with the historical code of conduct.

BTC / USD 1-day candlestick chart with RSI data (bitstamp) Source: TradingView

Analyst’s Eye Bitcoin Stock Decoupling

It’s a confusing world out there, and when it comes to how Bitcoin should behave, painting can’t be easier.

Inflation, the war in Europe, and the persistent threat of the return of the coronavirus (to name three major macrotriggers) have commentators who likewise predict the fate and darkness of equities and risk assets in 2022. I have it.

Just this month, sources warned that Bitcoin could soon face Waterloo as the dramatic stock surrender triggers another moment in March 2020.

Some argued that the “easy money” era that followed that event was over and that only continued quantitative easing would regain the huge capital flow that Bitcoin enjoyed later that year.

But now Bitcoin stands out on its own, with the S & P 500 appearing to be challenging the strong stock market correlations that hit its 17-month highs last week.

S & P has shaken off the effects of the war between Russia and Ukraine and planned a tightening by the US Federal Reserve, but analysis shows that sales are significant and short squeeze is ubiquitous. Ironically, it’s the perfect fuel for a fresh “short squeeze.” “Upward.

“The risk-on / risk-off correlation for equities is a short-term impact. BTC exchanges this correlation for short-term speculators,” Wu said recently. Twitter thread It has become a hot topic.

“The fundamentals of internal demand based on the Bitcoin adoption curve are stronger. Eventually the market will be cut off. Last time it was October 2020.”

If speculators have dominated the roost so far this year, a renewed interest in Bitcoin futures could trigger future attention. Open interest in Bitcoin futures has been at its highest since December, Coinglass data show.

Bitcoin Futures Open Interest Chart Source: Coinglass

Who wants to get their money back?

The $ 46,000 story has another side, more than the iconic level of the New Year.

As I got it According to on-chain analytics firm Glassnode this weekend, the area of ​​about $ 45,900 is an area with a large amount of previous buyer activity.

Market entrants have been underwater since buying on the way down from record highs and offering Bitcoin’s 2022 trading range cap.

The returns warned by Glassnode can ruin the mood when the exit rush from those buyers is performed.

“The next major resistance on Bitcoin’s chain is the short-term holder realization price trading at $ 45.9k. This metric is the average price paid to BTC by investors who purchased after ATH in October. I explained with the chart on Friday. Its long-term and short-term holders have realized a cap indicator.

“The bearish resistance comes from the” trying to get the money back “STH. “

Cap charts realized by long-term and short-term Bitcoin holders Source: Glassnode / Twitter

So far, short-term holders defined as entities holding coins within 155 days have not caused a turnaround, but the opening of Wall Street trading can still be a surprise.

Difficulty needs to hit record highs in a few days

The Bitcoin network fundamentals are undoubtedly determined not to be disappointed this year.

Next week is no exception, as the difficulty of the Bitcoin network will rise to a new record high of around 28.67 trillion.

This move follows a month’s loss, as Cointelegraph reported as a result of the cataclysm of miners operating in Kazakhstan.

However, the next automatic readjustment of difficulty not only offsets these losses, but also adds 4.4% to the existing aggregate, making it even more difficult than ever.

Bitcoin Difficulty 7-day average chart Source: Blockchain

As evidenced by Bitcoin’s similarly bullish hashrate data, the implications of increased difficulty are, in essence, that block subsidy mining is more competitive than ever.

Second, as the presence of miners grows, Bitcoin allocates more and more resources to compete for the same fixed rewards, making it more resistant to network attacks and protecting network participants in the process.

Last year’s 50% drop in hash rates caused by crackdowns in China, formerly the world’s mining hub, now seems to be a distant memory.

Meanwhile, attempts to ban support for Proof of Work cryptocurrencies in the European Union failed to get support from lawmakers twice last week.

According to data from the monitoring resource MiningPoolStats, the hash rate provided by a known mining pool is about 219 Exa Hash (EH / s) per second, which is itself the highest level ever recorded.

Greed is back for the first time since $ 60,000

Bearish at the bottom and bullish resistance — this is a classic market sentiment feature that is played over and over again.

Related: Top 5 cryptocurrencies to watch this week: BTC, ADA, AXS, LINK, FTT

But for the first time in 2022, the Crypto Fear & Greed Index showed how vibrant the average crypto investor is.

For the first time since just after Bitcoin’s record high of $ 69,000 in November, the classic sentiment index has entered the realm of “greed.”

Like the emotions of this month, the changes were impressive. Just a week ago, I measured my mood as a normalized score of 22/100. This is not only “fear” but also “extreme fear”.

Currently, it is in the process of showing signs of opposition, and as long-term investors know, sustained repulsion tends to occur only in parallel with a gradual increase in emotions.

But some of them remain clearly excited to see what happens next.

“While the supply shock begins, the crypto market is on a steady uptrend. To bring it back to record highs, we only need one bullish event,” said JRNY Crypto. Insisted Sunday.

“See how crazy things happen when emotions change from fear to greed while supply is limited.”

Crypto Fear & Greed Index (Screenshot) Source: Alternative.me

The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and transaction movements carry risks. When making a decision, you need to do your own research.