This week, Bitcoin has once again surged to the forefront of market conversation as it reclaims $62K. This move comes hot off the heels of what some are calling “Crypto Black Monday,” but this bounce-back is anything but expected. So, let’s dive into the details and see what this means for Bitcoin going forward.
Was That The Bottom?
On the weekly price chart, we can see that Bitcoin’s recent price action has formed an enormous bull hammer — a pattern which many traders regard as one of the strongest bullish signals possible. According to cryptocurrency analyst Matthew Hyland, this indicates that BTC may have found its floor and could be seeing the beginning of another upwards trend.
Key Takeaways:
- The asset briefly tapped $62,510 before coming to rest at $61,068.
- In just 24 hours, it recorded a 12.46% increase.
- Many people consider it a sign that the bottom might be in if they see a ‘bull hammer’.
- CoinMarketCap data shows that Bitcoin has recovered strongly from its dip below $50k on August 5th, which supports this bullish sentiment.
Is It A Bear Trap?
One theory that some traders have about what caused last week’s dip is that there were bear traps set up where experienced investors would manipulate markets to catch short sellers.
The speed with which prices bounced back has changed how futures traders feel about their positions — now most of them think long instead of short will do better over time.
Bear Trap Highlights:
- It saw its first drop since February down to $49,751.
- The speed of recovery implies manipulative moves by traders.
- 52.48% of futures positions are long according to CoinGlass data.
Backing up this change in sentiment is Morgan Stanley, which recently allowed its advisers to recommend Bitcoin Exchange Traded Funds (ETF) for clients — among other major financial institutions.
Analyst Sentiments Differ
However, not everyone is convinced that we’ve seen the bottom yet. Markus Thielen at 10x Research still thinks Bitcoin could go down into the low $40ks before the next true bull market takes off, while Timothy Peterson of Cane Island Alternative Advisors believes it will either hit $40,000 or $80,000 over the next 60 days.
Diverging Opinions:
- Some analysts think it could drop to low $40k.
- Others see BTC surging to $80k in the short-term future.
- The market is divided and that calls for careful consideration.
In Summary
After reclaiming above $62K this week, Bitcoin has injected fresh optimism throughout crypto markets once more. A massive bull hammer has formed alongside a potential bear trap, so things are looking up but uncertain. As always, prospective investors should be cautious and diligent before making any decisions.