Bitcoin Soars to Nearly $9,500 as the Spot Rally Flips On the FOMO Mode
Just days before halving, the risk-on environment is pushing up the price of bitcoin which went as high as $9,485.
After jumping 15% on Wednesday, Bitcoin further extended these gains today. Altcoins moved in tandem and the overall crypto market added $35 billion.
Interestingly, bitcoin is working on its 7th green candle and the last time it occurred was three years ago when the cryptocurrency broke into a new all-time high.
$BTC is working on seven straight weeks of green weekly closes
The last time Bitcoin had seven weeks in a row of green was the run up from $3500 to $5100+ in March-April 2019
Prior to that was June 2017
Higher time frames have looked good pic.twitter.com/CSXiL96TPF
— Josh Rager 📈 (@Josh_Rager) April 29, 2020
“This is an unprecedented time as liquidity remains a priority for investors fleeing equity markets. Therefore, while Bitcoin should rise into $10,000s after the halving, it could be followed with a price drop as investors engage in profit taking,” said Christel Quek, chief commercial officer and co-founder at Bolt Global.
“No level of technical support can stand when the economy is drained.”
Just like cryptos, other riskier assets – stocks are also up more than 30% over the past month but BTC has scored much higher 44% in April, which combined with the next two months May and June have “always been a strong period for $BTC.”
Moreover, Q2 has always been a bullish month for the leading cryptocurrency and one month in the quarter second and we are “living up to bullish expectations.”
Year-to-date performance (USD):#Bitcoin: +27.4%
S&P 500: -8.3%
— Alistair Milne (@alistairmilne) April 30, 2020
However, bitcoin’s sharp move past $9,000 has the flagship cryptocurrency entering overbought territory based on the GTI Global Strength Indicator. An asset is overbought if the reading of the indicator exceeds 70 which indicates additional gains for the digital asset may be difficult in the short-run.
“We are viewing the incredibly volatile trading range since 2018 as a longer-term basing/consolidation profile that has bottomed near its long-term uptrend (200-week moving average) and will likely resolve the bigger multiyear pattern to the upside over the coming two to four quarters,” said Rob Sluymer, an analyst at Fundstrat.
Retail driven rally?
As we reported, prior to this rally, retail investors have been coming in droves to buy the dip after the March sell-off. This uptrend is also the result of these holders that have no more than one BTC if BitMEX open interest, at its all-time low, is any indication.
“Bitmex OI hits a new All Time Low. This btc rally was purely a spot dominated ripper. Incredible,” noted Mohit Sorout, founding partner of Bitazu Capital. The volume meanwhile is off the charts, on BitMEX the volume was 10x the OI.
Yesterday the market had a vibrant trading session with the futures market recording an aggregated daily volume of $30 billion, “the most active session since the March crash,” noted Skew Markets.
Bitcoin options also had its busiest day since March 12th with the short term skew indicating a shift in investor sentiment as the price of puts relative to calls – came off rapidly on meaningful trading volumes.
— The Wolf Of All Streets (@scottmelker) April 29, 2020
But spot exchanges were leading the market this time as in the last 24 hours a whopping $4.68 billion worth of BTC exchanged hands-on top ten exchanges with real volume, as per Messari.
In the past 24 hours, a new record has been made, “Still going strong. FOMO mode now,” with the volume surpassing $16.4 billion, as per CoinMarketCap, the website recently acquired by Binance in a $400 million deal.
What’s to come?
For now, bitcoin is making a retreat, currently trading around $8,600. However, Nemo Qin, senior analyst at eToro expects,
“Bitcoin will test the $9,000-$10,000 range again prior to the halving.”
$BTC just remember the pump will always go further than you think and the dump will always hit you faster than you planned
— Altcoin Psycho (@AltcoinPsycho) April 30, 2020
And not everyone is in agreement with the bulls as halving will make it 50% less profitable to mine bitcoin.
Tyler's keeping it real ;) https://t.co/DyQlewYbXG
— ᴹᵁᴴ𝔍𝔬𝔢⁰⁰⁷ 🐳 (@J0E007) April 30, 2020
Bitfenix Bitcoin whale Joe007 might not be bullish on the ongoing uptrend as he said, “Organizing exponential FOMO rallies would be so much easier if not for the pesky little fact that you have to actually buy something in the end. With real money too.”
However, he has also stated that he is “never net short BTC” and that there was “definitely new fiat inflow lately, as evidenced by USDT market cap.”
After Black Thursday, trader Credible had said that the bottom is in and $14,000 is next adding, “14k before 3k still stands.”
But now that the bulls are extremely strong, so the pullback that would come won’t be as significant.