As a seasoned researcher who has witnessed the volatile rollercoaster ride that is the cryptocurrency market, I must say that today’s rally is nothing short of exhilarating. The resilience and rapid recovery of bitcoin (BTC) and other major cryptos are a testament to their growing maturity and acceptance as a legitimate asset class.
On Thursdays, cryptocurrencies bounced back significantly, with Bitcoin approaching $60,000 once more – a level not seen since the market turmoil over the weekend.
According to market analysts, two positive occurrences were identified as key factors fueling the surge in Bitcoin and cryptocurrency costs.
A United States judge granted approval on Thursday for FTX and its related trading company, Alameda Research, to disburse approximately $12.7 billion to their creditors. Many are optimistic that some of this money will return to the crypto market, as it’s expected that former users may choose to re-invest their settlement funds in digital assets.
In the meantime, Vladimir Putin, Russia’s president, approved a law allowing cryptocurrency mining within the country. This action suggests that Russia is attempting to stay competitive with the US. Ki Young Ju, CEO of CryptoQuant, commented, “There appears to be increasing national FOMO (fear of missing out) regarding bitcoin in countries worldwide.” He added that this move by Russia will likely increase the overall mining power (hashrate), fortify the network’s foundations, and bring diversity to the political landscape of miners.
Today’s increase means that Bitcoin has managed to turn around the downward trend it started earlier this week when it dropped to $49,000. Now, it is showing a positive change in its weekly chart.
Even though there’s still time before Sunday’s weekly close, if Bitcoin ends the week close to its current prices, it might create a ‘hammer’ candlestick pattern. This is a positive chart indicator in technical analysis that typically emerges near the bottom of declines, suggesting a potential trend reversal may be imminent.
Some analysts, however, warned that future price action could be choppy.
He expressed optimism about surpassing this particular threshold, but also acknowledged that it could potentially serve as a barrier. In other words, if we manage to go beyond it and close the day there, it would be considered bullish.
After periods of significant decline like the one seen on Monday, cryptocurrencies often do not recover in a straightforward manner according to David Zimmerman, an analyst at K33 Research. In simpler terms, the value of these digital currencies may not immediately bounce back in a straight line following such events.
According to Zimmerman, it’s important to remember that a V-shaped recovery isn’t typical. Instead of hastily jumping into new investments, it’s advisable to keep an eye on the prices within these fluctuations. The strategy should be to identify and invest in coins that demonstrate strength during this period.
“Even if we assume the bottom is in, we are likely in for some chop first,” he added.
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2024-08-08 20:43