The price of the top crypto has embarked on a massive and sustained bull run over the last few days. Its rise to above $5,900 levels was punctuated by several corrections, as it met various minor resistance levels. Needless to say, that makes the pump all the more convincing. The question now is: can the price make a support out of these previous resistance levels? If so, how will it handle the $6.2k psychological mark?
The resistance level we alluded to in the intro is obviously the $5,780 mark, which had been tested twice over the weekend, before today’s breakthrough occurred. Both times, the price shied away from it, only to bury it possibly for good on its third try.
If the $5,780 price level turns into a support as stubborn as it was a resistance before, it will provide a solid base for the attack on $6k.
Once past that level however several factors come into play.
As most of the time, this latest price surge appears to have been a fundamentals-fuelled one too. Most of the likely hurdles in the path of the price are also fundamental in nature.
One such hurdle is represented by the ticking time bomb of Tether and Bitfinex. It recently came to light that only about 74% of all Tether circulating out there is backed by actual cash.
Some have attributed the recent spike in BTC price to the “bank run” Bitfinex has been seeing. People are obviously in a hurry to turn their Tether to BTC before the seemingly inevitable meltdown happens.
Very few seem to realize the eerie similarities between Bitfinex’s recent decision to launch its own token to raise some money through what’s essentially an ICO, and the Bitconnect debacle. We may indeed be witnessing the last throes of Bitfinex existence. If it truly collapses, the price of BTC will likely take a hit as big as the Mt.Gox one years ago.
Another hurdle in the path of a BTC bull run is the $6.2k level. It is at this point that many who have stuffed their bags at the $3.2k mark would supposedly begin taking their profits. Such a development would result in a selloff and a subsequent drop.
There is certainly a major element of manipulation involved in crypto market mechanics. If this is part of an artificial pump, then it is bound to be followed by a dump that may send the price plowing new lows.
On the bull’s side of the barricade, we have Fidelity’s recent announcement concerning the imminent launch of their Bitcoin product. Such a move would certainly open a reasonable path into the crypto space for institutional investors. Allegedly, scores of such investors have been raring to get involved with BTC, but were unable to do so on account of the lack of a reliable and safe institutional product.
Has the bull market been confirmed yet?
Despite all the bullish signs, we cannot officially confirm the bull market yet. Not even from a strictly technical angle.
For that to come to fruition, a painful re-test of the 200-day MA and realized cap might be needed. This target is currently sitting at $4.4k.
Barring that, it may also be sufficient for the price stay above that mark for a significant amount of time.
What exactly does that mean? Another month or so – according to analyst Willy Woo.
If confirmation does indeed come, April 1st’s breakout will likely be confirmed as the start of the bull market.
On the bearish side, a drop below $5k cannot be excluded. As long as the price stays above $4.4k though, the long-term bullish picture remains intact.