After nearly a week of sideways movement, the Bitcoin price has displayed strength as it surged nearly 8% in the past 24 hours, smashing the $60,000 psychological level. But some questions still remain: ‘Why is Bitcoin rallying today?’ ‘Is the crash over?’ ‘Has the bull run restarted?’ In this article, let’s address these questions.
Related: Bitcoin Exchange Deposits Hit $2.71 billion as BTC Price Crashes Below $54K
Six Reasons why Bitcoin is rallying today:
- Weekend Pump: Historical data shows that weekends are generally positive for BTC.
- Liquidity: During the weekend, the volume traded is lower compared tot the weekdays, which is perfect for market manipulation.
- Breakout: BTC consolidation has led to a breakout pushing it form a low volatile phase to a high volatile period.
- Donald Trump’s Incident: Trump escaping an attempted assassination with minor injuries has instilled confidence in the markets.
But let’s dive deeper into the technical aspects of Bitcoin’s July 15 rally.
Why is Bitcoin rallying today?
Between July 5 and 12, Bitcoin’s price hit a low of $53,314 and largely traded below the psychological $60,000 level. The recent uptick in buying pressure seems to have occurred mostly in the early Asian session on Monday. Velo’s data shows that BTC’s six-month average return on Monday is 1.35%, the highest on weekdays. Conversely, Tuesdays have mostly seen corrections, aka the six-month average return is -1.20%.
Based on the six-month data, Tuesdays are the best days to buy the dips, and Mondays are the best days to book profits.
Additionally, weekend pumps are not unheard of for Bitcoin. The low liquidity over the weekends are one of the reasons why BTC sees volatile movements over the weekend. So, to conclude, Bitcoin’s rally over the past 24 hours could be attributed to low liquidity and trend following.
As a result of this short-term spike in buying pressure roughly $50 million worth of positions have been liquidated on Sunday and in the early Asia session on Monday, according to CoinGlass data.
Is the crash over?
For the time being, the risk of a further downside seems to be minimized since Bitcoin overcame the $58,400 and $61,184 blockades in a swift movement. But investors need to be cautious and wait for the volatility to subside and see if BTC holds above these key levels to decide if the downward movement is finished.
However, a breakdown of the $60,000 level could exacerbate the selling pressure, leading to a further downside. In such a case, BTC could revisit the $58,400 level.
Has the bull run restarted?
For a bullish trend reversal, an asset needs to produce a lower high and a lower low. this development will confirm the exhaustion of the bulls and a potential start of the downtrend. The recent crash and weakness shown by the bulls have erupted thoughts of a potential trend reversal.
To be fair, the panic-selling over the past week have satisfied the aforementioned conditions of trend reversal. Bitcoin showed weakness as it attempted to retest the all-time high of $73,949, leading to the production a lower high at $72,169 in early June. A few weeks later, BTC set up a lower low of $53,314 in early July, satisfying the trend reversal signs mentioned above.
So, the bull run has not restarted, but is in jeopardy.
