As the last week unfolded, one couldn’t help but raise eyebrows at the erratic behaviour of Bitcoin‘s price. From skimming three-month lows at around $25,734, the popular cryptocurrency waltzed its way back to levels akin to after the week’s close. Traders worldwide, while relishing the return to form, still couldn’t shrug their suspicion over this comeback that featured a $1,000 increase.
Prescient on-chain monitoring resources like Material Indicators, ahead of this surprise, had warned that the BTC price would face a ‘support test’. The risk was due to rapidly dwindling bid liquidity further down the order book. It was keenly observed by the same platform and others that prior ‘rug pulls’ mainly led to an upside in the Bitcoin market rather than a downside. This was often attributed to large-volume traders swiftly draining liquidity around the spot price. Even more so intriguing was the fact that they had accurately predicted $24,750 holding up as support on the downswing, a theory which continues to hold its ground.
Post this recovery, renowned trader Skew referenced this reversal as a ‘textbook short squeeze’. He, too, beckoned the bulls to overrun a resistance of $26,000. As the speculative wheel kept turning, a total of $12 million BTC shorts were liquidated as confirmed by resource CoinGlass, while $71 million in long BTC positions were bounded the day before.
Tips of optimism kept dripping into the market circle, as the next impulsive leap seemed right around the corner. Tributes for this upbeat sentiment went to a potential dominance breakout in Bitcoin’s market cap. Credible Crypto, another popular trader, took note of this activity and commented that there was a ‘decent argument’ for the market moving toward the next impulsive moment with BTC dominance breaking out.
On the flip side, plausible skepticism around this activity raised concerns about potential pitfalls. The optimism might be misleading as the bumps on the route to cryptocurrency popularity and adoption persist. Also, the speculative nature of such movements might be discouraging risk-averse investors affecting the larger market sentiment.
This balanced view of the BTC market nuances elucidates the complexities that go hand in hand with the future of blockchain. It becomes increasingly clear that, with soaring highs and plunging lows, this promising technology, while being a pedestal of opportunity, can still be a potential minefield for the unsuspecting. Ever-escalating suspense surrounding the next Bitcoin move is a testament to its embryonic and volatile, albeit revolutionary, nature.
Source: Cointelegraph
