Bitcoin and the rest of the crypto market have performed surprisingly well over the past few days. This week, the leading cryptocurrency hit $7,200, which marks a nearly 100% bottom from the ~$3,800 bottom that was put in place on March 13th. Even though the rally has cooled off, BTC trades at $6,800, which is just a smidgen below the levels seen pre-crash.
Although impressive, especially considering that this recovery took a mere three weeks, a key indicator suggests that there’s more upside for this nascent market.
Crypto Could Continue to Creep Higher, Key Indicator Suggests
According to a Bloomberg report published April 3rd, Bitcoin recently pushed above a key technical resistance, allowing the DVAN Buying and Selling Pressure Gauge to print a “positive divergence and a buy signal.”
To add to this, Bloomberg noted earlier this week that the “GTI Vera Convergence Divergence Indicator, which measures up and down shifts,” suggests the Bloomberg Galaxy Crypto Index — comprised of Bitcoin, Ethereum, Litecoin, Bitcoin Cash, XRP, and EOS — “flashed its first buy signal in over three months.”
Both indicators flashing buy signals preceded the 50% rally seen in the price of Bitcoin and most other cryptocurrencies that transpired from mid-December to February.
Other Factors Are Booming
It isn’t only crypto’s technicals that are strong, it’s the fundamentals too.
Qiao Wang of Messari, a former institutional trader, recently shared the below chart, which shows the Bitcoin order book for Coinbase Pro.
Although not representative of other exchanges, it is clear that there are more traders bidding the foremost crypto than selling it, with there existing nearly 24,000 BTC worth of orders down to an order price of $2,000 and a mere 4,000 BTC worth of orders up to $12,000. Wang wrote that “it can’t get any more long-term bullish than this,” referencing the data.
BTC order book… While I'm short-term cautious due to macro conditions, it can't get any more long-term bullish than this: pic.twitter.com/snq8ISFMCF
— Qiao Wang (@QWQiao) April 2, 2020
Furthermore, the next Bitcoin block reward halving is now only 40 days away, according to estimates shared by a number of sources on the web.
Traders believe that this event will have a decisively positive impact on the markets, citing an econometric model from analyst PlanB. The model suggests that the fair value of Bitcoin will shoot over 1,000% higher after the event, as PlanB found that BTC’s value is derivative of its own level of scarcity.
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