Bitcoin (BTCUSD) experiences a monumental surge as $48.54 billion floods the crypto market, marking the highest inflow since October 2021. Bitcoin breaks through the $65,000 resistance, approaching its all-time high, propelled by U.S.-listed Bitcoin ETFs’ strong demand, especially from BlackRock and Fidelity Investments, accumulating a net of $7.35 billion. Small-cap tokens skyrocket, echoing the 2021 bull run. This unprecedented institutional adoption signifies growing mainstream confidence in cryptocurrency.
Furthermore, the anticipated Bitcoin halving event in April 2024, which will significantly reduce the rate of new Bitcoin creation, is already influencing market sentiment. Investors are pre-positioning themselves for the potential price appreciation that historically follows halving events. However, some analysts warn of overheating signs, such as the record-high open interest in Bitcoin futures.
Daily Technical Analysis:
BTCUSD is trading at $65,336.56, showcasing a robust uptrend above key SMAs. The price action trades above the upward-sloping 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line), indicating a positive trend. RSI (83.66) is steeply upward-sloping in overbought territory.
Short-term trading opportunities could exist towards the all-time high of 69,000 should the bulls sustain a break above the recently achieved three-year high of 65,614.97. A break above the all-time high could confirm the bullish momentum, likely bringing the 38.20% (71,150.52) and 50.00% (72,860.46) Fibonacci extension levels into play.
Despite the excitement, caution is warranted as signs of an overheated market emerge, and the RSI in overbought territory (83.66) signals a need for vigilance. Therefore, a retracement could find significant support at the 23.60% Fibonacci retracement level (59,258.60), with a break below likely to bring the 38.20% Fibonacci retracement level (55,326.27) into play in the short-term.
Summary
Bitcoin is experiencing a powerful bullish rally, fuelled by institutional adoption, the upcoming halving event, and FOMO. At the same time, the technical indicators suggest further upside potential, the overbought RSI and potential market overheating caution against excessive optimism.
Sources: TradingView, Trading Economics, MarketScreener, Reuters.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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