The cryptocurrency market showed bullish gains on Wednesday as the price of Bitcoin (BTC) changed the exchange rate and rose 20% to $37,500.
In recent weeks, analysts have debated whether BTC has entered a long-term downtrend, and this argument has been further complicated by a mix of positive and negative headlines, including the acceptance of Bitcoin as legal tender in El Salvador. Chinese authorities are ordering Chinese search engines to block search results linked to the country’s top cryptocurrency exchanges.
Data from Cointelegraph Markets Pro and TradingView shows that the bitcoin price has risen 20% from a low of $31,000 late Tuesday night to an intraday high of $37,450 as bulls appear to be in control of the trend.
4 hour BTC/USDT chart. Source: TradingView
The rally is seen by many as optimism, including Mike McGlone, chief trading analyst at Bloomberg Intelligence, who now believes that Bitcoin is more likely to hit $40,000 than fall to $20,000. On the other hand, traders like Rekt Capital believe that the weekly BTC close should exceed $32,000 to avoid further inconvenience.
The coming days will determine the fate of the bull races
The steady stream of positive data, along with renewed regulatory breaches in China, has some traders wondering whether a bullish reversal is imminent or if the current price action is not a bullish trap.
According to Delphi Digital, a clear head and shoulders pattern on the BTC chart is a potential bearish indicator.
Bitcoin head and shoulders pattern. Source: Delphi Digital
Despite this bearish pattern, analysts have also noticed the formation of a bullish divergence on the RSI, which indicates the possibility of a trend reversal in the near future.
Bitcoin price and bullish RSI divergence. Source: Delphi Digital
According to Eli Lee Rest, partner at digital asset management firm ExoAlpha, “the message about bitcoin as a store of value is stronger than ever,” but he feels that the leading cryptocurrency “needs to consolidate its dominance” until the current bull completes it.
Le Rest referred to the news that El Salvador has recognized BTC as legal tender as an “important step towards Bitcoin adoption,” and expects other countries to follow suit in the coming months and years.
As for the future outlook for Bitcoin, Le Rest stated that after a drop of $30-40K in recent days, the $40K gap could “resume the upward trend that occurred a month ago.”
Le Rest Sa:
“Traders are still questioning the direction of the market, so the impact has been relatively low as foreclosures have been painful since May. A break of $40,000 may increase traders’ confidence that they can once again leverage the book to reach new heights in the cryptocurrency market.”
Entrepreneurs are also watching Ether (ETH), with Le Rest citing Tuesday’s “massive ETH turmoil” as “a positive sign that ETH’s bull run is far from over,” but cautioned that alt chains that Binance Smart loved are working. Chain, Solana, and Avalanche are working hard to gain market share in DeFi.
Altcoins crowd together with bitcoins
Daily performance in the cryptocurrency market. Source: Coin360
Bitcoin’s rally to $37,500 has also stimulated many altcoins.
Ether price is up 14% from a low of $2,300 on Tuesday to an intraday high of around $2,630, Delphi Digital notes that the price of Ether is buoyed by a drop in supply of Ether in circulation as 23% of supply has now been opened by Smart Deflation .