Bitcoin Sell-Off Over? Bullishness Continues to Permeate the Market
This week, the price of Bitcoin has been on a rollercoaster ride. We started with a dump right after hitting a new all-time high last Sunday at about $58,350.
Following the drop, we made several attempts to go back up but only to end up lower and yesterday, we went down further down to $44k.
As of writing, BTC is seeing some relief trading around $46,800 but that’s to be seen if the upward momentum will continue or take us only lower. Trader TheCryptoDog said,
“At this point my assumption is we don't go lower from here. That can change at the drop of a hat (we'll see what happens to macro on Monday), but looking at this now I would be more surprised to see BTC sink.”
One caveat is March, the month which in the last six out of seven times have been a red one with an average drawdown of over 14%.
Unlike BTC, Q1 is good for Ethereum which five out of six times ended with significant greens, already it is up 102% YTD despite the losses. This week, it went down to $1,350 during this recent sell-off, even lower than the previous ATH of $1,420.
Bitcoin’s lack of direction, right now, is turning out good for altcoins, leading to a 15% to 30% uptrend. The total market cap has also recovered to $1.455 trillion, adding more than $100 billion in the past 24 hours.
All This Bullishness
While the price action in the market isn't’ looking bullish, the developments in the market certainly suggest so.
For starters, the first Bitcoin ETF debuted on the TSX last week, Purpose Bitcoin ETF (BTCC) continues to see demand and now holds more than 10,000 BTC.
If we look at the premium on the Bitcoin product of the world’s largest digital asset manager, Grayscale which went negative this week, but is expected to be just short-term noise, could actually turn out to be bullish.
Started in late Sept. 2013, “Outside of 2013-2014 this has only occurred 4 times. With fees of 2% and a current discount of 2.5%, BTC can be bought inside the trust cheaper than at market,” noted one analyst.
“Like the last 2 times, does the bull continue?” he added.
Bitcoin miners are also sending bullish signals as they stop their selling and start accumulating BTC. For the first time in two weeks, Miners Position change has turned positive.
The Spent Output Profit Ratio (SOPR) indicator, which is the price sold / price paid, is another one that has gone back to level 1, indicating the bottom on the sell-off.
Not to mention, money-making exchange Coinbase has announced its public listing and got more than $100 billion valuation. This would make the company CEO, Brian Armstrong who previously worked at Airbnb to get rich and join the world’s 500 richest people.
Even more bullish is the news that the House passed its $1.9 trillion coronavirus relief package early on Saturday, which will now head to the Senate. Democrats are rushing to approve more aid before unemployment programs expire on March 14.
This time, payments of $1,400 will be made to most individuals, along with the same amount for each dependent. $1,200 stimulus check from last time invested in Bitcoin at the time is currently worth $8,500 and surpassed $10,000 last week.
And just like the last stimulus package, this could propel the market higher.