By
Steve Muchoki
May 6th, 2024
Bitcoin (BTC) price has managed to jump above the $7,200 levels within the last 24 hours but now BTC is trading below $7,000.
Bitcoin (BTC) price has recently risen above $7,000 in the past twenty-four hours. But at the time of writing, BTC is trading at $6,899.21 (+3.68%). The altcoins have followed suit in the price recovery. XRP and Ethereum (ETH) are both up by 1.96% and 4.38%. This jump followed a similar tendency in the oil market. Oil priced went up 24% after the announcement about a possible end of the oil price war.
Bitcoin (BTC) dominance has remained relatively unchanged. Bitcoin dominance is still around 65.4%. This indicates that the crypto space is still ruled by the first of the cryptos.
Bitcoin prices at the end of March were still lackluster. Prices were at $6,606.78 as of the 31st of March.
Bitcoin (BTC) Price Is Partially Driven by Futures Markets
Many within the crypto-space believe that the Bitcoin futures markets have a positive effect on Bitcoin price. Sources say that all the major futures markets have seen huge volumes of orders being processed.
Top Bitcoin futures market BitMEX has reportedly experienced about $2.9 billion worth of orders processed in the last 24 hours. Other bitcoin and cryptocurrency futures platforms have seen similar patterns as well. BitMEX has also liquidated about $90 million worth of the cryptocurrency in the past 24 hours alone.
Huobi, OKEx, Binance futures, ByBit, Deribit, and others have all seen increases in the processing of orders. The reason is not as far-fetched as many would have liked to believe.
Before now, Bitcoin and cryptocurrency prices began their decline. This happened early in March. The dual cryptocurrency outages that occurred on 12th March were a major contributing factor to Bitcoin prices to drop below $4,000.
Futures traders had already been longing the cryptocurrency as well. They had anticipated that Bitcoin (BTC) price will rise come April. It appears that they were right. Cryptocurrency assets usually recover faster than any other asset in the financial markets.
The price rise is affected only slightly by the trader’s actions. One reason for this has to do with the total active capitalization of cryptocurrencies. Cryptocurrency markets aren’t subject to centralized forces. Whales may make their mark in the crypto-space, but this is only temporary.
Cryptocurrencies Are Immune to Financial Shocks
The fundamental principle that cryptocurrency markets are immune to financial market shocks holds. Many investors are using cryptocurrencies as a hedge against the current COVID-19 situation. The current malaise of the world’s financial markets is apparent as there is no end in sight to the economic and business effects of COVID-19.
The new resistance price level of $8,000 is purely psychological. many believe that due to the technical reasons, prices won’t break through this level.
The Bitcoin and cryptocurrency markets to date have been mostly fundamental. As such, major price moves occur when something fundamental happens.
Technical situations still affect the market but not as much as the fundamentals. We should all expect to see new price highs as the stay-at-home restrictions may lead to the adoption of cryptocurrencies by many.
This influx of entrants into the crypto-space will help break through Bitcoin prices of $8,000, $10,00, $13,000, $15,000 and maybe even the biggest one of them all: $20,000. These resistances will also be tested as Bitcoin prices will find new support levels to test the resistance.
For now, though, Bitcoin will have to find a new support level first before any talk of the $8,000 resistance level can occur.