Bitcoin (BTC) might surge towards $64,000 in case the signs of bottoming out coming from the US stock market are true. The biggest crypto rallied above $41,000 on February 28 in a new sign of buying sentiment returning after the past week’s severe selloff across the risk-on markets, including the S&P 500.
The price of bitcoin gained 9% to reach highs of $41,400, in part, as the traders reacted to the continuing development in the Russia-Ukraine crisis. In doing that, the crypto shortly broke its correlation with the US stock market indexes to act more like the haven gold, whose price also surged in early trading on February 28.
BTC Downtrend Is Exhausting, Analyst
One independent market analyst, Johal Miles, spotted “significant buying pressure” in the market, adding that its downside momentum might be going towards exhaustion.
Miles commented on Bitcoin’s recent upside retracement moves upon testing levels near the $34,000 support. For example, on January 24 and February 24, Bitcoin’s price formed a bullish hammer candlestick on its daily chart, hinting at a U-turn during an established downtrend.
The same bullish hammers came up last year in May and June, with their bottoms remaining below the key support level of $30,000. That was followed up with a steep price reversal in the Bitcoin market with Bitcoin’s price reaching as high as $69,000 in November 2021.
Moreover, Miles noted that the buying sentiment in the area between $28,500 and $34,200 came to be comparatively higher than $46K, the support that the biggest crypto broke to the downside in January 2022.
The analyst tweeted on February 28:
“The key difference between the current range and the range we had previously at $46 thousand is we are now seeing significant buying pressure when we visit the lows. The spells exhaustion of the downtrend to me, similar to summer.”
https://twitter.com/JohalMiles/status/1498261166262530049
Buy Bitcoin NowCan Bitcoin Reach $64K?
The CEO and founder of VNX, Alexander Tkachenko, highlighted BTC’s potential to rebound steeply after a confirmed United States stock market bottom. He added that its price might reach $64,000 according to Wycoff’s methodology. VNX is a Luxembourg-based token issuance platform.
He said:
“From a global perspective, all signs are that Bitcoin has entered the re-accumulation stage according to Wycoff’s methodology.”
“One can expect a move towards USD64,000 and a further upward trend mid-term. The potential growth in the price of Bitcoin is imminent as projected, particularly drawing on the coin’s close ties to mainstream or the traditional stock market, the S&P Index.”
The macro analysts also noted that the benchmark S&P 500 may have begun bottoming out after it staged a historical reversal on February 24. In detail, the index rebounded by almost 4.5% despite being originally down by over 2.5%. This form of retracement has never happened since the 2008 financial crisis.
https://twitter.com/BaroVirtual/status/1497959905185001474
Co-head of derivatives strategy at Susquehanna International Group, Chris Murphy, said that the steep stockmarket reversals amid a price correction are “indicative of a classic bear market rally,” except in the scenario that the economy has not been undergoing a phase of recession.
Murphy told Business Insider while highlighting the thriving U.S. economic data:
“Historical precedence says we are [near the lows of the ongoing correction] if we avoid a recession.”
He mentioned a lot of factors including a strong consumer balance sheet to record-high corporate earnings to the strengthening labor market.
These views lined up with what FS Insight projected in its recent S&P 500 market analysis. Co-launched by ex-JPMorgan’s equity strategist Tom Lee, the company noted that the index showed some signs of bottoming out.
FS’s head of technical strategy, Mark Newton, said in a note:
“Prices remain under prior days’ highs amidst a negative trend with bearish momentum. I favor being long and buying dips, anticipating that markets work higher into March FOMC and that Growth outperforms Value.”
Classic Bollinger Band W bottom on the weekly $SPX chart.https://t.co/FHEInV5pwE
— John Bollinger (@bbands) February 25, 2022
The correlation between Bitcoin and S&P 500 was 0.36 above zero as of February 28 at 4:30 pm UTC.
