Bitcoin has seen a notable upswing today that has marked a significant extension of the momentum that was first incurred yesterday when the benchmark cryptocurrency rallied from lows of $5,100 after being caught within a bout of sideways trading for an extended period of time.
Analysts are now noting that this ongoing rally is not being driven by margin positions, but is rather being fueled by spot BTC purchases, signaling that retail investors are the suspects behind this momentum.
This is a bullish sign that comes as one trader is noting that the crypto is currently on the brink of breaking through a level that could spark the next notable bull market.
Bitcoin Surges Towards $7,000 in Retail-Driven Rally
At the time of writing, Bitcoin is trading up just under 10% at its current price of $6,400, which marks a slight retrace from daily highs of $6,900 – where the crypto faced insurmountable resistance.
Although BTC has since retraced from these highs, it is important to note that it is showing some signs of fundamental bullishness, including the fact that this recent upswing has been driven by retail investors rather than margin traders.
Mohit Sorout – a partner at Bitazu Capital and a well-respected trader – explained in a recent tweet that BitMEX’s open interest is currently at an all-time low, signaling that Bitcoin’s upwards momentum has been driven by spot purchases.
“Bitmex OI at all-time low of 58k. We’re seeing a spot driven rally on BTC,” he explained.
Bitmex OI at All time low of 58k.
— Mohit Sorout ? (@singhsoro) March 20, 2020
This suggests that retail investors believe that Bitcoin offers an attractive value proposition at its current price level and may signal that further upwards momentum is imminent in the near-term.
Is BTC on the Cusp of Entering Another Firm Bull Market?
Satoshi Flipper – a prominent cryptocurrency trader on Twitter – explained in a recent tweet that he believes the $6,800 region is the only resistance stopping Bitcoin from entering a full-fledged bull market.
“See the circled area? Breaking that level is the only thing that stands between us and a $BTC bull market. Few days ago we were at $4k, now we’re trying to break $7k. Don’t be a stubborn fool and sit on the sidelines waiting for $2k…it’s not coming,” he bullishly noted.
See the circled area?
Breaking that level is the only thing that stands between us and a $BTC bull market.
Few days ago we were at $4k, now we're trying to break $7k.
Don't be a stubborn fool and sit on the sidelines waiting for $2k…it's not coming. pic.twitter.com/X1fr746WrP
Because Bitcoin was rejected at this level just a few hours ago, it is a strong possibility that the cryptocurrency will see some further consolidation or downside before it is able to make another bid at this level.
Featured image from Shutterstock.