Bitcoin is Back Above $40,000. Will it Hold?
Earlier today, the price of Bitcoin (BTC) breached the $40,000 level – regarded as a major resistance zone – for the foremost time in the last five trading days. Traders anticipate a wider rally to happen and a bullish market pattern to develop in case Bitcoin breaks above $42,000 and Ether (ETH) hits $3,000.
Bitcoin has been on a rebound in the last week due to three major criteria. To start with, Tesla CEO Elon Musk and MicroStrategy CEO Michael Saylor have been advocating Bitcoin miners to utilize green energy.
Saylor and Musk have taken another initiative by discussing the matter with Bitcoin miners in the US about dependable energy usage. Secondly, the Bitcoin futures market has rebooted to a big manner. As per data provided by Bybt.com, when Bitcoin fell below $30,000, the futures market open interest declined from $27 billion to $11 billion.
This implies that the futures market is not jam-packed, lifting the likelihood of a more maintainable and systematic uptrend. Thirdly, Ether has been gaining ground in the last few days, which also offers an advantage to Bitcoin and altcoins because ETH recorded an in-depth price correction that Bitcoin.
Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.
— Elon Musk (@elonmusk) May 24, 2021
The price of top cryptos rebounding as a lot is increasing the sentiment about Bitcoin, paving way for systematic revival of the cryptocurrency market. In the short-term, traders state that $42,000 is the crucial near-term resistance zone, and later on, $49,000 is the major sell zone.
An identified trader, referred to as Pentoshi, wrote:
Many alts coming into some resistances +/- a 5%
We’ve gotten mean reversion as discussed during the nukeHowever $BTC has been stuck. It started it’s LH trend a month ago. Would like to see Bitcoin pop + 42k or alts likely make their own LH’s and dip again. Clock is ticking pic.twitter.com/XwaFLvKGs0
— Pentoshi 🐧wont DM you (@Pentosh1) May 26, 2021
In the short-term, Bitcoin traders need to monitor two major criteria i.e., exchange outflow and the resistance level of $42,000. Theoretically, a breach of $42,000 level and rise of Bitcoin exchange outflows in parallel would imply that the optimism of investors in Bitcoin and whales is increasing.
Nevertheless, there are worries of a technical ‘dead cat bounce’ pattern, which reflects a short-term rebound. A consolidation above $42,000 implies that the possibility of a lasting uptrend would increase.
AuthorKelly Cromley
Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.
