Last week, Bitcoin encountered a significant decline in its price, but on Friday, it staged a remarkable comeback, reversing the downward trend. On Wednesday, May 1, the primary cryptocurrency dropped below the $60,000 mark for the first time in almost two months. However, on Friday, May 3, Bitcoin’s price rebounded above $60,000. As of this writing, it had even surpassed the $64,000 threshold. Now, the question arises: Can this recent resurgence transform into a sustained rally for Bitcoin?
Article Contents
How long will the BTC price rally endure?
Background behind the surge in Bitcoin’s price
How long will the BTC price rally endure?
A recent analysis by Santiment delved into the latest price fluctuations of Bitcoin and observed that the movement above $62,000 signifies a shift in sentiment and positions among investors. According to their analysis, traders on the Binance platform have transitioned from focusing on short positions to emphasizing long positions as a result of the recent price surge.
This change in sentiment could be indicative of renewed optimism regarding the leading cryptocurrency. However, Santiment cautioned individuals monitoring Bitcoin’s price and contemplating entering the market. As stated in their blockchain analysis:
FOMO, or the fear of missing out, describes a scenario in which investors hastily purchase assets due to the fear of missing out on potential gains. While this can temporarily drive up prices, excessive FOMO often leads to unsustainable surges followed by declines. Furthermore, crypto prices often move in opposition to the expectations of the community. Therefore, if most traders anticipate a rise in Bitcoin’s price, a drop in price is likely to occur.
Background behind the surge in Bitcoin’s price
At the time of writing this article, the cryptocurrency Bitcoin had surpassed $64,400 in price. The critical level to watch now is $65,000. Consequently, it has experienced a 7% surge in the past 24 hours. The exact catalyst behind the recent Bitcoin rally remains uncertain, but on-chain data suggests that recent whale activity may have triggered the upward momentum.
Ki Young Ju, the CEO and founder of CryptoQuant, recently revealed that Bitcoin whales had purchased 47,000 BTC in a single day. Ju also mentioned that this group of investors may include addresses associated with ETFs, although the recent increase in “whale addresses” is not related to ETFs.
Disclaimer:
The information presented in this article should not be considered as investment advice. Investors should be mindful that cryptocurrencies are highly volatile and therefore carry risks. It is essential to conduct individual research before making any investment decisions.
