Bitcoin (BTC) thrived over the weekend amid the financial crisis that has engulfed the U.S. banking system and the global economy. The cryptocurrency surpassed the $23,000 level and appears to be poised to make a sweeping loss at $25,000.
BTC managed to bounce back after filling the $19,800 gap on CME. The current price action has caught short sellers off guard, liquidating short positions totaling over $300 million in the past 24 hours.
For BTC investors, Bitcoin has served its purpose while the traditional U.S. system is caught in the crossfire of the Federal Reserve (Fed) and inflation rates in its mission to avoid recession.
Signature Bank, Silicon Valley Bank and Silvergate Capital were all victims of hawkish inflationary policies. But what is the key to the price action Bitcoin is experiencing right now? Cryptocurrency analyst Adrian Zdunczkyk weighed in.
Key Reasons Behind Bitcoin’s Rally
according to For Adrian Zdunczyk, the price of Bitcoin has retraced 20% from its peak of $25,000. According to analysts, this confirms that a localized crash will not affect BTC’s long-term shift, but could hint at a correction. Despite the break below $20,000, the 200-day moving average is trending sideways.
For analysts, BTC’s current price action is a long-term accumulation zone between the $15,500 and $25,200 levels. The bulls now appear to have the upper hand as investors are confident about the $21,700 level following the ongoing meltdown in traditional markets around the world.
The 200-day moving average trendline acts as the “magic” support at $20,000, which the bulls quickly reclaimed, presenting investors with an excellent opportunity if another correction is imminent. Regarding this possibility, Zdunczyk said:
The 9-year seasonal review shows that March has been a bearish and loss-making month. With a -64.39% annualized return and only 33.33% profitable trades, BTC investors shouldn’t have too much faith in this month’s bullishness.
Conversely, the 11-year “sell in May and leave” pattern has justified the “favorable odds” for April-May price action for traders, as winning trades during this period have produced annualized returns of more than 72% historically Watch offers “optimism in the outlook for the next two months,” Adrian said.
Bitcoin uptrend on the 1-day chart. Source: BTCUSDT on TradingView.com
Despite such predictions, the good performance of the Consumer Price Index (CPI) in February, and the fact that the Federal Reserve did not rise by more than 25 basis points, could trigger a significant upward trend in the most famous crypto in the market.
A break above $24,000 and further consolidation in previously lost territory is significant for BTC as it is in a key zone. The cryptocurrency is attempting to break through a resistance wall that it failed to breach four times before correcting below $20,000.
Currently, Bitcoin is trading at $24,100, having surged 19% over the past 24 hours. On the 7-day time frame, BTC regained lost ground with a profit of 8.9%.
Featured image from Unsplash, chart from TradingView.com
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