Another successful week for Bitcoin. For seven weeks, the cryptocurrency has been rising in price against the US dollar, outperforming traditional assets in terms of profitability. On March 4, Bitcoin started the week with a strong rally, rising 8.13% to $68,245. This was due to several factors, including the news that Stanford University’s Blyth Fund spent about 7% of its portfolio buying Bitcoin. Memcoins also showed high volatility, growing by tens of percent. On March 5, Bitcoin updated its 2021 all-time high of $69 thousand on some exchanges. However, shortly after this, the price collapsed by 15% in 5 hours, reaching $59,005. The collapse led to the liquidation of long positions of $890 million and short positions of $288 million. On March 6, Bitcoin recovered by 11.85% to $66 thousand after the fall. Altcoins also quickly recovered losses, signaling a continuation of the rally.
On March 7, at the end of the day, the BTC/USDT pair increased by 1.13%, to $66,823, on March 8 – by 1.95%, to $68,194. If on Thursday trading was calm without sharp price fluctuations, then at the beginning of the American session on Friday There was increased volatility. The Bitcoin rate rose to $69,990. From $70 thousand, a downward correction followed. Probably, sell orders were triggered, which stopped the growth and provoked buyers to close long positions. As a result of the fall after updating the historical maximum, the total amount of liquidations in the market exceeded $300 million, including $148.73 million on short positions versus $155 million on long positions. Against this background, the price dropped by 5.5%, to $66,082. There is another factor that could have a negative impact on all exchanges. The Coinbase trading platform has crashed for the third time this month. The disruptions occur as the price of Bitcoin tries to establish new peaks. Some investors were not surprised by the collapse, given Coinbase’s history of crashing during moments of explosive trading volume. For others, it seems deliberate, with the goal of enriching the exchange’s VIP clients.
Sellers are trying to stop the rally, but so far all their attempts have failed. As soon as the order book is empty, buyers, buying Bitcoin through market orders following the trend, quickly win back most of the losses. Someone is tired of looking at their growing profitability of tens of percent (they entered the market at a low price) and, fearing a deep correction, decide to completely or partially close their longs. Some people, on the contrary, short in anticipation of a deep correction, because they do not believe in continued growth until halving. There are also late market participants who did not have time to capitalize on the rally, and the syndrome of lost profits (FOMO) pushes them onto the train after quick pullbacks.
The rapid growth of Bitcoin is largely due to the launch of US spot Bitcoin exchange-traded funds (ETFs) and the April halving. Inflows from these ETFs remain high. The crypto market receives additional support from the weakening dollar on Forex and the growth of American stock indices. On Sunday, March 10, Bitcoin (BTC) was trading at $69.7 thousand, its price has increased by about 13% over the past week. Our specialist analyzed the market situation and assessed the prospects for the movement of the Bitcoin rate over the next seven days.
In the market, everyone has their own motivation, trading and investment plans. The chart shows us all the actions of market participants. It shows that those who short against a strong trend are not yet lucky. There are no signs yet that the flow of funds into digital gold will decrease. After falling to $66,082, the price recovered to $69,379 within 5 hours. The technical background on the weekly, daily and hourly timeframes is optimistic for continued growth. Investors should not be surprised if Bitcoin takes a break for a few days (flat) and then continues to grow again. According to BitRiver forecasts, in the absence of negative news, the zone of $73,000 – $75,000 is seen on the horizon. Sharp corrections cannot be avoided, since a lot of long positions are opened on the margin market with leverage. A small part of investors know how to calculate risks in the futures market. Accordingly, sharp drawdowns are possible at different points in time. According to our calculations, the growth phase should last until the beginning of May, but there is no confidence that the trend will continue until the end of April.
