In the first half of April, bitcoin rose to $30,000 for the first time in 10 months, and has been trading at that level for the past week. Is the crypto-zima over and should we expect further market growth?
Over the past year, bitcoin has lost 65% of its all-time high price, recorded in November 2021. At the beginning of spring, industry experts predicted the continuation of the crypto-zima.
The Coinbase team speculated that the aftermath of the FTX crash would extend the cryptozyma until late 2023, while former PayPal president David Marcus suggested that cryptozyma would not end until 2025, when the market recovered from last year’s turmoil.
However, April saw a trend reversal as bitcoin rose to $30 000, back to June 2022.
In terms of technical analysis, during the week of April 7-14, bitcoin overcame the previous resistance level of $29,380, which has now become a support level. The new resistance level is $32,376.
Reasons for rally
The Fear and Greed Index in the bitcoin market hit a new high again this week, with the index reaching 69.
Typically, the index goes into the “greedy” area at moments of rapid growth of the market, when the owners of cryptocurrencies do not want to miss the opportunity to earn on the next bullish rally.
According to analysts, a combination of factors led to the growth of bitcoin to $30,000:
- Liquidation of short positions. During the week of April 7-14, short positions were closed for more than $170 million, while the figure for long positions was less than $60 million.. This may indicate bullish sentiment among investors;
- Further U.S. Federal Reserve rate hikes. During the same period, the leadership of the U.S. Federal Reserve described the possibility of further interest rate increases. As experts suggest, further easing by the regulator could lead to an increase in the price of bitcoin to $40,000;
- Increasing difficulty of mining. Bitcoin network once again set a new record for mining complexity. Now it is at about 47.89 trillion, indicating a high level of interest on the part of miners. Previous recalculations of the complexity were also upward, and the next recalculation should result in its growth by 1.74%. There is no direct connection between the growth of the BTC price and the complexity of mining, but the interest of miners, as a rule, favorably affects the market.
- Growth in the technology sector. Another indirect factor that gives cryptoinvestors faith in the bright future – the growth of securities of technology sector companies. Since the beginning of the year, the NASDAQ is up more than 16% and the Dow Jones is up just over 2.5%.
Despite the fact that bitcoin still fails to grow above $30,000, some analysts believe in a positive scenario for the trend.
For example, DonAlt, who accurately predicted a bullish rally for BTC, considers the possibility that the cryptocurrency will take off strongly and come close to the historical maximum of $69,000.
In his opinion, after the line of $33,000 will be followed by a small rapid correction wave, after which the BTC will switch back to the growth stage.. However, not all experts are optimistic.
Will there be a fall?
Although many in the community are now preparing for a new rally, some users and experts view the new trend with apprehension;
According to a Twitter user nicknamed WhaleWire, the current rise in bitcoin is artificial and was caused by Tether issuing “billions of USDT”, thus injecting fake liquidity into the market in order to lure real liquidity into the industry.
He also sees no similarities between the 2019 rally and the current growth