Bitcoin (BTC) started the last week of March with a bang after returning to its annual opening price above $46,000.
In a surprisingly strong upside move for a weekend, BTC/USD started rising on Saturday, continuing through the night to challenge its early 2022 highs.
Against a macro climate of ongoing significant uncertainty, power in Bitcoin is naturally taken with a pinch of salt this month.The backlash is understandable given that previous attempts to break out of the multi-month trading range have all failed.
Despite the volatile periods, the bulls have always been disappointed and Bitcoin has not only reversed later, but has revisited the lower end of its range, costing both short and long positions.
However, hope will really be different this time – analysts have long argued that just a break above the range ceiling created by the annual deficit of around $46,200 would be enough to cause a paradigm shift.
Now that we’ve acted on these charts, attention is focused on the last hurdle – consolidating these few months’ resistance levels as support.
With the process ongoing on Monday, Cointelegraph takes a look at potential triggers that could make or break this important chapter in Bitcoin price action.
Bitcoin erases the 2022 drop
“Slowly, then suddenly” or is it pure luck? Traders are still trying to understand the newfound power of Bitcoin this week.
A sight that hasn’t been on the chart since New Year’s – BTC/USD bounced back at $47,000.After jumping almost $3,000 in 24 hours, the biggest cryptocurrency has taken a hard hit to the resistance levels that have kept the bulls in place for months.
The significance of $46,000 has been a hot topic for almost a long time – many said the return to annual openness would be a sign that Bitcoin is ready for big things once again.
However, few would have thought that the phenomenon would take place “out of hours”, and doubts about the true strength of the rally naturally continued as the week continued on social media, just as the rally began.
March 2020 – ct downtrend, fooo up
may 2021 ct is on the rise, fooo is on the decline
july 2021 ct was bearish, fooo risking fooo’s entire reputation further up
november 2021 fooo starts dumping, ct is on the rise
now ct is on the rise and fooo is on the decline
Healthy
— fooo – Mayor of Goblin Town (@bitcoinpanda69) [26 March 2022]
However, more cautious voices no longer rule out the potential for further upsides, even if the longer-term prognosis remains downhill.
[$BTC] update
annual open label
Flip to support then 50k next with potential move to 53k imo
— Pentoshi (@Pentosh1) [March 27, 2022]
Analyst and statistician Willy Woo said, “Essential buying pressure for Bitcoin has now climbed into bull market territory” reported .
Meanwhile, fellow analyst Matthew Hyland, a key supporter of the $46,000 argument, gave a target of $52,000 to break as the next long-term resistance wall.
[#Bitcoin] Breaks above the $46,000 resistance zone
The next major resistance zone is around $52,000: [pic.twitter.com/ueqi5xwkhi]
— Matthew Hyland (@MatthewHyland_) [March 28, 2022]
In his Twitter posts he Additional Prior to the move, a breakout occurred in Bitcoin’s relative strength index (RSI) indicator, itself a classic breakout trend signal.
The RSI assesses how much an asset is overbought or oversold at a given price, and Bitcoin’s score has been climbing from its base level since mid-January, according to data from Cointelegraph Markets Pro and TradingView.
Therefore, further development of the RSI can determine the scope of the rally according to historical norms of behavior.
Analyst watches Bitcoin shares diverge
There is a confusing world out there, and when it comes to how Bitcoin should behave, the picture is not easy.
Inflation, the war in Europe and the continuing threat of the coronavirus – to name just three major macro triggers – commentators have predicted doom and gloom for 2022 for stocks and risk assets.
Just this month, multiple sources warned that Bitcoin could soon face Waterloo, as a dramatic stock takeover triggered another moment in March 2020.
Some have argued that the era of “easy money” that followed this event was over and that only continued quantitative easing would bring back the massive capital flows that Bitcoin achieved later that year.
But now Bitcoin seems to stand out on its own, challenging an intense stock market correlation that hit 17-month highs last week in the S&P 500 example.
As S&P fends off the impact of the Russia-Ukraine war and the U.S.Federal Reserve’s tightening plans, analysis shows sales are substantial and shorts are everywhere — ironically the perfect fuel for a new “short squeeze” up.
Stock Traders sold well in this rally:
• One of the largest weekly liquidations in history (as a percentage of Market Cap)
• Total $ sales record broke
• Custom Positioning now significantly Net Short – more at risk of jamming
Similar setups led to some Great rallies.[pic.twitter.com/iTYGfEh5iS]
— Macro Charts (@MacroCharts) [26 March 2022]
“The risk/risk relationship for stocks is a short-term effect.“BTC is trading this correlation because of short-term speculators.” Twitter series About the subject.
“Domestic demand fundamentals are stronger, supported by Bitcoin’s adoption curve.
Eventually the market splits; The last time was October 2020.”
If speculators are ruling the roost so far this year, the reversal in interest on Bitcoin futures could be a forward trigger.Open interest in Bitcoin futures is now at its highest level since December, according to data from Coinglass.
Who wants their money back?
There’s another side to the $46,000 story, making it more than just a symbolic take on the New Year.
Aspect noted This weekend, around $45,900 by on-chain analytics firm Glassnode is an area with a huge amount of upfront buyer activity.
Market entrants bought as it slumped down from its all-time high and have been inundated ever since, thanks to Bitcoin providing the ceiling for the 2022 trading range.
Glassnode warned that a comeback could spoil the mood as a rush to exit these buyers.
“The next major on-chain resistance for Bitcoin is the Short-Term Owner Realized Price, trading at $45.9k.This metric is the average price paid for BTC by investors who bought it after the October ATH.”
“Bear resistance comes from STHs looking to ‘get their money back’.”
So far, short-term holders, defined as holdings of cryptocurrencies for 155 days or less, have not triggered the shift.But the start of Wall Street trading can still produce surprises.
Difficulty should hit an all-time high on days
Bitcoin’s network fundamentals are determined not to disappoint this year.
Next week will be no exception as Bitcoin’s network difficulty climbs to new record highs of around 28.67 trillion.
The move will follow a month of losses that accompany the results of the turmoil for miners operating in Kazakhstan, as Cointelegraph reported.
However, the next automatic recalibration of Difficulty will not only eliminate these losses, but will add 4.4% to the current number, making the difficulty greater than ever before.
The increased difficulty means that mining for block subsidies has never been more competitive, as evidenced by Bitcoin’s equally bullish hash rate data.
Bitcoin becomes more resistant to network attacks as the growing miner presence dedicates more and more resources to competing for the same fixed reward, thereby protecting network participants in the process.
Last year’s 50% hashrate drop, caused by a crackdown in China, formerly the mining stronghold of the world, no longer seems like a distant memory.
Effects of “banning” Bitcoin mining.Bitcoin hash rate new ATH is higher than when the “ban” occurred.[pic.twitter.com/pY5ea1rCJB]
– CZ Binance (@cz_binance) [25 March 2022]
Meanwhile, the European Union’s attempt to ban support for Proof-of-Work cryptocurrencies failed to gain the support of lawmakers for the second time last week.
According to data from the MiningPoolStats monitoring resource, the hash rate provided by known mining pools stands at around 219 exahash per second (EH/s), the highest ever recorded.
Greed is back for the first time since $60,000
Drop at the bottom and rise at the resistance – this is a classic market sentiment feature that comes up again and again.
Related: Top 5 cryptocurrencies to watch this week: BTC, ADA, AXS, LINK, FTT
However, for the first time in 2022, the Crypto Fear and Greed Index revealed just how enthusiastic the average crypto investor feels.
For the first time since Bitcoin’s all-time high of $69,000 in November, the classic sentiment indicator has entered “Greed” territory.
The transformation of this month’s emotion was impressive as well.
Just a week ago, she measured her mood as a normalized score of 22/100 – not just “fear” but “extreme fear”.
Now, it’s on its way to showing the opposite, and as long-term investors know, along with steady rallies come gradual increases in sentiment.
Big jump in Fear and Greed Index today [$BTC] movement.
The last time we entered the greed zone this far, the price was +$60k.
Live chart: https://t.co/Jr5151icga [pic.twitter.com/KZtsava7jZ]
— Philip Swift (@PositiveCrypto) [March 28, 2022]
But some are clearly excited to see what happens next.
JRNY Crypto said, “The crypto market is in a steady uptrend as the supply shock begins.Just one bullish event is all it takes to send it back to all-time highs.” argued Market.
“Watch how things go wild when emotion goes from fear to greed while supplies are limited.”
The views and opinions expressed here are those of the author alone and may not necessarily reflect those of Cointelegraph.com.Every investment and trading move involves risk, you should do your own research when making a decision..
