BTC/USD is now trading at $20,270, a 7.5% increase from its 24-hour low of $18,858. Surprisingly, the rise occurs in the face of persistent pessimism in global markets, with the Dow Jones entering a technical bear market after falling 1.1% yesterday, bringing its slide from January highs to 20%.
According to the data, BTC’s rise may be attributed mainly to rising spot trading volume, with the cryptocurrency’s recent drop to support levels around $18,500 sparking a subsequent recovery. While breaking the $20,000 barrier may signal a short-term breakthrough, with the macroeconomic picture still looking somewhat murky, now may not be the ideal investment moment.
Bitcoin Soars to a New High of $20,270, Up 8%
Bitcoin and the cryptocurrency market as a whole had a rough week. On Thursday, BTC hit a 7-day low of $18,424. It briefly recovered on Friday but spent the rest of the day and night trading around the $19,000 mark.
Even if BTC’s indications have risen, the cryptocurrency has not yet entered the overbought territory. Its relative strength index has skyrocketed in the last several hours, rising beyond 50.
Its 30-day moving average is still much below its 200-day moving average. This indicates the present trend isn’t necessarily over, but it does indicate that Bitcoin hasn’t yet entered a valid breakout.
Despite the market’s lackluster performance recently, experts see today’s activity as a sign of a possible breakthrough on a smaller scale.
Eight creators and analyst Michal van de Poppe forecasts a BTC price climb reaching $23,000 (and beyond) shortly. However, he acknowledges that the price of Bitcoin may see some stabilization before increasing again.
In addition, BTC’s current upswing may be traced back to a “lot of spot volume,” according to Van de Poppe. In light of the continued negative investor mood and the resulting declines in the stock markets, the real issue is what produced such a surge in volume.
Bitcoin’s price and the cryptocurrency market have dropped significantly from their highs last year. In contrast, the stock market has yet to show a decline commensurate with the macroeconomic climate.
Compared to Bitcoin’s 71% drop from its ATH, the Dow Jones’s recent bear market and the S&P 500’s 23% drop from its January high seem very little.
BTC’s Future
Not surprisingly, given the current economic climate’s lack of clarity, opinions vary as to what today’s change in bitcoin’s price implies for the cryptocurrency’s future.
It has been speculated that Bitcoin’s recent upswing represents a bullish divergence, signaling that the cryptocurrency is beginning a new trend. Yet many see today’s positive developments as nothing more than a typical bull trap.
Further, one might argue that the world economy has seen the last of its inflationary and interest rate increases. While inflation has decreased somewhat in several countries, energy and food costs have reached their respective peaks.
