Last week witnessed a significant decline in the price of Bitcoin, but on Friday, it made a powerful comeback, reversing the downward trend. On Wednesday, May 1, the leading cryptocurrency dropped below the $60,000 mark for the first time in nearly two months. However, by Friday, May 3, Bitcoin’s price had climbed back above $60,000 and had even surpassed the $64,000 mark at the time of writing. Now, the question that arises is whether this recent resurgence can transform into a sustained rally for Bitcoin.
Article Contents
How Long Will the BTC Price Rally Last?
Background of Bitcoin’s Price Surge
How Long Will the BTC Price Rally Last?
A recent analysis by Santiment delved into the latest fluctuations in Bitcoin’s price and observed that the movement above $62,000 signifies a shift in investors’ positions and sentiments. According to their study, traders on the Binance platform have transitioned from being focused on short positions to being focused on long positions following the recent price hike.
This change in sentiment could indicate a renewed sense of optimism in the leading cryptocurrency. However, Santiment cautioned those monitoring Bitcoin’s price and contemplating entering the market. As stated in their blockchain analysis:
FOMO, which stands for the fear of missing out, refers to a situation where investors hastily purchase assets out of fear of missing potential gains. This can temporarily drive up prices, but excessive FOMO frequently leads to unsustainable surges followed by declines. Furthermore, crypto prices often move in opposition to the community’s expectations. Therefore, if most traders believe that Bitcoin’s price will rise, a price drop is likely.
Background of Bitcoin’s Price Surge
At the time of writing this article, the price of the cryptocurrency Bitcoin had surpassed $64,400. The critical level to watch now is $65,000. Accordingly, it has experienced a 7% increase in the past 24 hours. The exact catalyst behind the recent Bitcoin rally remains unclear, but on-chain data suggests that recent whale activity may have sparked 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 surge in “whale addresses” is not linked to ETFs.
Disclaimer:
The information provided in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks, and they should conduct their own research.
