Bitcoin Enjoying 8 Straight Weeks of Upside; Last Seen in 2017 It Then Printed a 30% Pullback
Since moving back above $9,000, Bitcoin is now staying over $9,300 while managing a “real” daily trading volume of about $2.2 million.
According to the trader and crypto investor, Josh Rager bitcoin is currently in a clear range where it could go on for days. “BTC remains bullish-neutral in this range,” he said.
With these gains, Bitcoin has enjoyed 8 straight weeks of upside, which was last seen during April – July 2017. However, it was followed by a bearish week that printed a 30% pullback.
Bitcoin has enjoyed 8 straight weeks of upside
The last time $BTC saw 8 straight weeks of upside?
April 2017 – June 2017
— Rekt Capital (@rektcapital) May 7, 2020
Recapturing the Broken Logarithmic Curve
Interestingly, bitcoin is back to following the logarithmic curve that the digital asset has been following its entire existence.
During the global market sell-off triggered by COVID-19 fears that had the world's leading digital currency crashing about 50% to $3,850, it shattered the logarithmic curve.
But now after 48 days, trader Jonny Moe noted that bitcoin has recaptured the curve.
After the sell-off in March, risky assets rebounded in April and unlike bitcoin, stocks have struggled for direction this month. Bulls and bears are dueling over the outlook while the efforts to reopen economies and unprecedented stimulus present an optimistic outlook.
As Kruger has pointed out, liquidity helps all assets, given that the US Federal Reserve hasn't bought if not bitcoin then neither stocks, corporate bonds, and ETF either, although it is to start in May.
As for Bitcoin, the number of active entities on the leading network is currently the highest since the 2017 bull run.
Demand temporarily increased
The positive momentum in bitcoin price has been due to increased demand from both retail and non-retail market participants.
The spot volume surged first during the March sell-off and now during the recent rally. Increased volume can also be seen on CME and Bakkt while the open interest on CME bitcoin futures spiked to a new all-time high.
This increase in volume was the result of higher unemployment benefits, the $1,200 COVID-19 relief stimulus checks, and tax rebates as they offset the impact of the spike in unemployment that reached 30 million in six weeks.
According to Goldman Sachs’ research, this is why US household disposable income will be larger in 2020 than in 2019 despite the coronavirus lockdown.
Household Income in the USA could actually be up this year even though we could have 25% unemployment. That is unprecedented.Thanks Uncle Sam and Chairman Powell. helps with social unrest, might explain the retail bid to the stock market,and certainly helps make the $btc case.
— Michael Novogratz (@novogratz) May 6, 2020
“The proximity of the halving helps increase demand temporarily,” said trader and economist Alex Kruger.
As we reported, the price moved sharply higher against the backdrop of relatively flat funding which indicated that this was largely driven by the spot market.
However, BitMEX funding isn’t negative any longer. Also, the futures curve is back into contango, though the basis is low.
Bitcoin price will become vulnerable “once traders overleveraged on the long side, as they always do,” and the greed cycle will repeat itself, said Kruger.
The good thing is the risk of inefficient miners dumping their BTC due to reward halving is “not as significant” because the market has already forced the weakest hands from the market during the March sell-off.
However, according to Kruger, mining rewards reduction is also not as important because “incremental flow is already low.”