Why Bitcoin Hasn’t Bottomed Out Yet, This Signal Will Tell When It Has

Reynaldo Marquez

1 year ago

3 mins read

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Bitcoin continues its uptrend leaving bears in disbelief. The first crypto by market cap got back in the green after a short squeeze brought it back from the underworld in the low $30,000s.

As of press time, Bitcoin trades at $44,375 with a 2.2% and 14.3% profit in the last 24 hours and 7 days, respectively.

Bitcoin BTC BTCUSD — BTC with bullish momentum on the daily chart. Source: BTCUSD Tradingview

BTC’s price recent strength has made a large portion of the market more optimistic. Traders seem more inclined to believe Bitcoin will continue its uptrend in a straight line now that it has returned to mid area of a major price point.

However, the cryptocurrency is currently in resistance and has failed to successfully breach these levels.

Data from Material Indicators records an important cluster of ask orders above BTC’s price current levels. As seen below, there are almost $20 million in ask orders spread from $44,000 to $47,000. This suggests BTC’s price could face some obstacle to break above them and flip them into support.

bitcoin btc — BTC’s price (blue line) with thin support (bid orders below the price). Source: Material Indicators

However, Bitcoin’s most important resistance level stands at $50,000, as there are over $20 million in ask orders on this price alone. The cryptocurrency needs successfully closed above it to support BTC’s price bullish thesis.

Conversely, there are significant bid orders below current levels that could operate as support in case of further downside. It is worth noting that the bid side, unlike its counterpart, seems weaker with most of the supported clustering around $40,000 to $41,500.

Additional data provided by Santiment via analyst Ali Martinez indicates that Bitcoin whales have been buying the dip. At least, those investors with 1,000 to 10,000 BTC acquired 120,000 BTC since the start of 2022.

The Signal That Could Hint At A Bitcoin Bottom

As NewsBTC reported, BTC’s price was poised for a short squeeze as the macro factor pushing it down mitigated for the short term. Although Bitcoin whales seem more active, it seems too early to claim there is an increase in demand for the top crypto by market cap, but signals point towards that direction.

Senior Commodity Strategist for Bloomberg Intelligence Mike McGlone believes BTC’s price will fail to hit a convincing bottom until the U.S. stock market does. The expert said:

Most assets in 2022 face strong deflationary forces from the excesses of 2021, but Bitcoin appears well poised to come out ahead as it matures to the status of global digital collateral and shows divergent strength.

The S&P 500 has been seen some relief but could face more turmoil as the market enters March and expect the U.S. Federal Reserve to make a decision on interest rates. Both the stock and BTC market could see choppiness until tomorrow when the U.S. will publish its CPI metrics.

Analyst for Bitbank Yuya Hasegawa told NewsBTC the following on the implications for a new CPI print as BTC enters uncertain waters:

The CPI is expected to rise 7.3% year on year, which is 30bp higher than the previous month. Without a sign of inflation slowing down, there is no guarantee that the Fed would not double down on monetary tightening, especially after the strong jobs report last Friday.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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