Bitcoin (BTC) Extends a More Bullish Rally
Bitcoin (BTC) started to show some strength with a more significant rally above the $23,000 range. Late on Tuesday, BTC traded at above $23,100, following a temporary glitch on price reporting that put USDT as the largest asset by market capitalization.
Briefly, the asset lineup placed a different list of tokens, skipping some of the larger assets including BTC and Ethereum (ETH).
How Far Can the Rally Extend
The current rally was triggered by ETH rising above $1,540, taking along altcoins. BTC also bounced after weeks of signaling the current cycle bottom may have played out at just under $18,000.
Wrapped BTC, which showed price information for the underlying asset, quickly moved to $23,262.64, signaling the rally may continue during US trading hours. Additional predictions hinge on a BTC short squeeze causing a bigger rapid rally. The current breakout may shift predictions for the coming months, for now avoiding a lower price bottom.
The price recovery immediately affected smaller tokens, underscoring the market enthusiasm. After reaching low volumes, the subsequent buying and pumps are reviving some of the coins. Demand may return after most of the DeFi liquidations have been completed and most of the affected parties of Three Arrows Capital and Celsius are already known.
The recovery may repeat the scenario after the crash of Luna LFG, which led to more price action after the initial crash. Once again, the crypto slide helped traders acquire some assets at a lower price range.
The BTC market cap dominance returned to 42%, despite most altcoins and tokens adding upward of 20% to their value. Surprisingly, NEXO was among the gainers, despite rumors that the protocol may be exposed to significant risks similar to Celsius. NEXO added more than 28% to its price on a weekly basis, rising to $0.76 and briefly breaking to a one-month peak above $0.78.
Is the Pump Just Exit Liquidity
The current pump is seen as a short-term relief with no guarantee of extension. However, crypto relief rallies can be significant, with BTC recently eyeing a return to the $24,000 range.
Trading also moved out of the fear range and into neutral sentiment, signaling a possible shift in direction. The current rally may have established a stable price floor, as BTC accumulation continued during the recent lows. Even with further slides, the willingness to hold onto coins remains strong.
Suggestions reappeared that BTC may be on an upward leg after the period of accumulation. For the first time, coins on the Binance exchange are also more than those on Coinbase. During the past quarter, more wallets moved their assets from exchanges to privately held addresses.
One of the reasons was precisely the failures of Voyager and Celsius, prompting users that giving BTC for custodial keeping may be unsafe.
The recent upward price move predictably led to around $74M in liquidations, predominantly of short positions. The rally to the current price range may also be a deliberate attack to known accumulations of shorts.
BTC also invalidated a previously expected deeper price cut as low as $16,000 or even down to $10,000. BTC also broke out above a local resistance level, briefly breaking over $23,200 as predicted before returning to a lower range.
Now, attention returns to BTC with expectations of repeating at least the 2021 rally to an all-time peak.
BTC also realized significant losses after miners’ capitulation and selling during the relief rally. As the cheaper coins changed hands, some saw an opportunity for a shift to a higher range.
BTC will now have to prove the strength of the rally by holding onto the recent gains, envisioning the potential to extend the rally as high as $28,000. The immediate effect for BTC were trading volumes that revived above $45B in the past 24 hours.
USDT trading volumes also recovered above $76B in 24 hours, bringing liquidity to other tokens as well.
Bitcoin network mining slowed down somewhat after a recent capitulation, leaving fewer miners to compete for coins. The network’s hashrate decreased below 200 EH/s. The next BTC halving is still far, but may start to get mentioned as part of the price narrative.
ETH remains above $1,550, up more than 44% over the past week on hype about launching as a proof-of-stake network. The power of ETH and a market cap dominance above 18% boosted other platform coins.
Avalanche (AVAX) added 42% in the past week to $25.02. TRON (TRX) remains stagnant at around $0.069 despite the overall recovery, with the TRX price potentially moving on different price logic.
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