Bitcoin bounced 14 percent early on Tuesday at 5: 00 Hours UTC. The rise was followed by months of low volatility as Bitcoin remained stable around the $3850-$4000 range.
Bitcoin had attained a price of $5106 on Bitfinex Exchange. However, the highest price recorded on Coinmarketcap was $4849.46.
While there were no fundamentals backing the price, Mati Greenspan, senior market analyst at trading platform eToro, told CNBC.
“Bitcoin’s break above $4,200 this morning was critical, as the market had been watching that level for a while. No doubt some entry orders and stop losses were grouped right above. Meaning that certain algorithmic trades had kicked in after it reached this higher level.”
Bitcoin Shorts Level: A Key Indicator of Market Sentiments
A sudden surge in the price above 10% often increases the probability of profit booking since the market starts looking for a correction. Moreover, Bitcoin was trading in the $4000 range for a long time. Hence, the sentiments might suggest that volatility on a daily scale could be lower than 14%.
However, Greenspan noted through a tweet that the volume shorts is way lower than expected. Hence, it suggests that the market sentiments have reversed on the bullish side.
Greenspan note from the Graph that despite the surge the market, the shorts levels are still low.
“Bitcoin shorts at Bitfinex (blue line) near their lowest levels since February. So no, it doesn’t seem like too many people are selling the pop.”
Bitcoin CME Futures at 9: 30 hours UTC on 2nd April 2019 was trading at $4760. It was trading 20% higher on a 5-Day scale.
Bitcoin had been trading under bearish pressure for far too long. Nevertheless, almost all of the Bitcoin and cryptocurrency traders are optimistic of Bitcoin prices in the long run. However, the obvious FUD around Bitcoin bottoming was still prevalent. Hence, a break above the $4200 mark with more than 10% surge only restores market confidence which is evident in the percentage decrease in the volume shorts on Bitcoin.
Do you think that the market sentiments have reversed on the Bullish Side? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com