- The Bitcoin price has once again crossed the $50,000 mark and regained the strongest level of on-chain support
- According to technical analysis, $52,000 needs to fall to invalidate the theory of a bull trap.
After Bitcoin reached a new high of over $58,000 on February 25, the price was stuck in a correction over the past 10 days, which extended to $43,000. However, as we reported the last two days, there are now several signals pointing to an end of the correction. The current rise of the BTC price above $50,000 is certainly another reason. At the time of writing, BTC broke through this mark for the first time since February 25.
The on-chain data supports the breakout. IntoTheBlock stated that the In/Out of the Money Around Current Price Indicator (IOMAP) shows that Bitcoin is “now sitting at the strongest level of support.” The level of on-chain support is between $46,200 and $47,700, as there were more than 1.66 million addresses previously acquired roughly 878,000 Bitcoin.
The IOMAP indicator reveals that #Bitcoin is now sitting on the strongest level of support.
This level of on-chain support is located between $46,2k and $47,7k. Here, more than 1.66 million addresses previously acquired roughly 878 thousand $BTC.
— IntoTheBlock (@intotheblock) March 2, 2021
In addition, analyst Willy Woo pointed out that the “Entities Net Growth” chart shows the increase in Bitcoin users visible on the blockchain per day. According to Woo, retail investors got into Bitcoin in January. As with previous cycles, he expects “this peak to be higher than those before it. Gives you an idea how this bull market is just warming up,” Woo said.
On the technical analysis side, Twitter analyst “Credible Crypto” stated that the hidden bearish div is likely to be invalided, which is a good sign for the bulls. However, the analyst also warned that it could be a “bull trap”. Based on that, Credible Crypto is waiting for a breakout above $52,000 as a confirmation of the end of the correction:
But, I still believe this to be a major bull trap. Rather than a running flat, it looks like we will get an expanded flat. If right, we should see a fairly quick rejection after clearing the highs at 52k.
Is a massive hype cycle on the horizon?
Beyond this data and analysis, however, there is currently one factor that could be the key to a continuation of the bull run: Institutions and large investors. There has been a lot of bullish news to report in the past few days. For example, a Bitcoin ETF has become a big topic again in the United States. Just yesterday, Cboe filed an application with the SEC to be allowed to trade an ETF partially backed by Bitcoin.
Furthermore, Goldman Sachs had announced the reopening of its crypto trading desk, while Twitter announced the issuance of convertible bonds to possibly buy more Bitcoin as rumors suggest. Last but not least, one of the biggest Bitcoin critics in recent years, Shark Tank’s Kevin O’Leary, has changed flipped his mind about Bitcoin. O’Leary stated yesterday that a price of $100,000 per Bitcoin is “not too crazy anymore.” He also suggested that the flagship cryptocurrency’s market cap could reach $20 trillion.
Beyond that, it is currently not just O’Leary who is changing his mind about Bitcoin. As analyst Michael van der Poppe explained, at the moment it seems inevitable that Bitcoin will heat up and enter a massive cycle:
All those signals that those big players are flipping their mindset on #Bitcoin is telling enough, isn’t it? JPMorgan stating that investors could have 1% #Bitcoin allocation in their portfolio. It’s inevitable, #Bitcoin is heating up for a massive cycle.
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