Bitcoin (BTC) rallied above $41,000 on Feb. 28 in a new sign of buying sentiment returning after last week's brutal selloff across the risk-on markets, including the S&P 500.
BTC's price jumped by over 9% to reach $41,300, in part, as traders reacted to the ongoing development in the Russia-Ukraine crisis. In doing so, the cryptocurrency briefly broke its correlation with the U.S. stock market indexes to perform more like safe-haven gold, whose price also went higher in early trading on Feb. 28.
Bitcoin downtrend exhausting — analyst
Johal Miles, an independent market analyst, spotted "significant buying pressure" in the market, adding that its downtrend might be heading towards exhaustion.
Miles highlighted Bitcoin's recent upside retracement moves upon testing levels near $34,000 as support. For instance, on Jan. 24 and Feb. 24, BTC's price formed a bullish hammer candlestick on its daily chart, hinting at a U-turn during an established downtrend.
The same bullish hammers appeared last year in May and June, with their bottoms sitting below the key support level of $30,000. This was followed up with a sharp price reversal in the Bitcoin market with BTC's price reaching as high as $69,000 in November 2021.
Additionally, Miles noted that the buying sentiment in the area between $28,500 and $34,200 came to be comparatively higher than around $46,000, a support Bitcoin broke to the downside in January 2022.
"The key difference between the current range and the range we had previously at $46 thousand is we are now seeing significant buying pressure when we visit the lows," the analyst tweeted Feb. 28, adding:
The spells exhaustion of the downtrend to me, similar to summer.
BTC to $64K?
Alexander Tkachenko, CEO and founder, VNX — a Luxembourg-based token issuance platform, highlighted Bitcoin's potential to rebound sharply following a confirmed U.S. stock market bottom, adding that its price could reach $64,000 based on Wycoff methodology.
"From a global perspective, all signs are that Bitcoin has entered the re-accumulation stage according to Wycoff's methodology," he told Cointelegraph, adding:
"One can expect a move towards USD64,000 and a further upward trend mid-term. The potential growth in the price of Bitcoin is imminent as projected, particularly drawing on the coin's close ties to mainstream or the traditional stock market, the S&P Index."
Macro analysts also noted that the benchmark S&P 500 might have started bottoming out after staging a historical reversal on Feb. 24. In detail, the index rebounded by nearly 4.5% despite being initially down by more than 2.5%. Such a retracement has not happened since the 2008 financial crisis.
Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, said sharp stock market reversals during a price correction are "indicative of a classic bear market rally," except when the economy has not been undergoing a phase of recession.
"Historical precedence says we are [near the lows of the ongoing correction] if we avoid a recession," he told Business Insider while highlighting the improving U.S. economic data, ranging from a strong consumer balance sheet to record-high corporate earnings to a strengthening labor market.
The views lined up with what FS Insight predicted in its recent S&P 500 market analysis. Co-founded by JPMorgan's former equity strategist Tom Lee, the firm noted that the index showed signs of bottoming out.
Related: Hodl, don’t trade, says the AI Bitcoin trading bot
"Prices remain under prior days' highs amidst a negative trend with bearish momentum," said Mark Newton, FS's head of technical strategy, in a note, adding:
"I favor being long and buying dips, anticipating that markets work higher into March FOMC and that Growth outperforms Value."
The correlation between Bitcoin and S&P 500 was 0.36 above zero as of Feb. 28, 4:30 pm UTC.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments