Bitcoin Traders Believe That $34K Is The Lowest It Will Go But There Is Not Enough Data To Back It Up

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On Thursday, Bitcoin (BTC) had a dramatic turnaround and continued to rise into Friday. For the time being, selling pressure has subsided, indicating that buyers in the $30,000 to $46,000 bracket may stay active.

BTC has risen 6% in the last 24 hours and is now trading above $38,000. Nonetheless, the cryptocurrency has lost 2% in the last week, indicating that the latest rally has not reversed the short-term downward trend.

Bitcoin Prices Are Slowly Increasing

According to the DeMARK indications, Thursday’s price action prompted the first downward exhaustion signs, similar to what happened on Jan. 24 before a 30 percent price increase. However, depending on the state of long-term momentum readings, counter-trend signals in negative markets may be fleeting or invalid. On both the weekly and monthly charts, momentum is currently negative.

The immediate resistance level is $40,000, which might put a stop to the current price rally. Stronger resistance can be found near $46,700, which limited earlier this month’s gains. After Russia promised to speak with Ukrainian officials, bitcoin and other cryptocurrencies gained on Friday. Meanwhile, investors struggled to make sense of geopolitical developments, causing global markets to sway.

The S& P 500 stock index surged more than 2%, while Russia’s currency edged slightly, but still around its lowest level in history. On Friday, bitcoin underperformed other alternative cryptocurrencies (altcoins), indicating that investors have a higher stomach for risk. Over the last 24 hours, BTC has remained relatively unchanged, compared to a 5% gain in XRP and a 10% spike in Terra’s LUNA coin.

Because of the increase in volatility, some investors believe the crypto price recovery will continue. On Thursday, Bitcoin’s one-week implied volatility soared to an annualized 75 percent, exceeding the one-, three-, and six-month gauges, similar to what happened after the fall in May 2021. Bitcoin’s inverted volatility structure generally precedes price bottoms. Investors’ expectations for price turbulence over some time are called implied volatility.

Volatility surges, on the other hand, might be fleeting, delaying a large increase in BTC’s current price. Bitcoin traders believe the bottom has been reached, but it’s also vital to evaluate BTC’s relationship to the stock market.

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