Bitcoin is retaining its strength following a strong bounce from its $30,000 support.
The rise of bullish sentiment drove most cryptocurrencies higher on Thursday. As of this week, Bitcoin traded at around $32,300, increasing its value by approximately 1% over the past week. This scenario happened after positive comments from Tesla CEO Elon Musk on Wednesday went viral, leading to the price recovery to stall off $30,000 support. Musk had announced that Tesla is rethinking its current stance on Bitcoin and said the company is “most likely” to resume accepting Bitcoin payments.
Technical indicators also imply that the downside could be limited to $34,000 in resistance.
In his email to CoinDesk, Lukas Enzersdorfer-Konrad, the chief product officer at Bitpanda, defined the cryptocurrency trading environment as a “roller coaster ride.”
Enzersdorfer-Konrad noted that the price of Bitcoin has been making lower highs and lower lows over time, with its price stability in a downtrend. He also said that as long as the competition among sellers continues to rise, buyers will not change the market back to normal until the resistance breaks.
Latest Prices: Cryptocurrencies vs. Traditional Markets
- Bitcoin (BTC): $32370, +2.37%
- Etherium (ETH): $2028.2, +4.57%
- Gold: $1806.1, +0.11%
- S&P 500: 4367.3, +0.2%
Unknown to some, bitcoin was overbought already, even before The B Word conference happened on Wednesday. So now analysts are questioning whether the remarks from Musk will motivate bitcoin investors to stay engaged or not.
Despite being called a positive spark, Ulrik Lykke (CEO of ARK36) said that the jury is still out on whether the resulting confidence will be enough to turn the markets in a new direction.
As long as investors are mindful of the risk, they should keep in mind that this effort may not be enough to alter the current downward momentum, he added.
Bitcoin short-term holders start capitulating
The analysis by Glassnode reveals that short-term holders who held Bitcoin significantly below the purchase price are now in capitulation mode.
the short-term MVRV-to-realized ratio, which is the lowest level it has been since January of this year. Note how the low MVRV ratio tends to occur in bearish price trends, and capitulation events are tied to this, claims Glassnode.
Bitcoin’s dominance becomes more stable
As of the moment, Bitcoin’s dominance ratio stabilizes compared to Bitcoin’s market capitalization with regards to the aggregate market capitalization of other cryptocurrencies.
This fact indicates that Bitcoin’s market share is no longer fluctuating, which means that the ratio has been rising from the level of 39% over the past six months could lead to further upside in bitcoin versus other cryptocurrencies.
In the past few months, cryptocurrencies like Bitcoin have gained a reputation as a safe haven asset when other assets like altcoins suffer more significant losses during bear markets in 2018.