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Why This Bull Run Will Be Different from the Last Time

February 6, 2021 at 21:03 by Ibrahim Anifowoshe

Just days after Microstrategy pitched Bitcoin to over 1,400 companies, the cryptocurrency broke through the crucial level at $35,000. In a strong recovery rally, Bitcoin continued to soar till it broke $40,000 earlier today. At 19:08 GMT, a price of a BTC was trading at $40,045, a gain of 6.03% in the last 24 hours. This is the first time in 23 days Bitcoin is achieving this price mark.

As it stands, it appears the combination of a less crowded Bitcoin futures market, the whales order flow reaching an all-time high, and a fast recovery would help maintain Bitcoin above the $40,000 mark.

Whales order flow causing Bitcoin recovery

Earlier on January 29, a Bitcoin researcher and analyst called the “Material Scientist” noted that mega whales order flow reached an all-time high. This suggest that the selling pressure coming from traders and investors dealing with $1 million to $10 million orders reached a record number.

Material Scientist noted at the time:

Whales bought back almost everything they had sold since $40k, and mega-whales are about to make a new ATH on their orderflow. Downtrend is over, IMO. New ATH soon, don’t miss it

material scientist chart

 

What Bitcoin needs now is to establish $40,000 as a new support area. If this is achieved, it would mean that Bitcoin can move towards a new ATH without the selling pressure of whales and high net-worth investors.

Two key support levels are needed for Bitcoin to maintain this bullish momentum: $40,000 and $37,834.

On the other hand, data provided by Whalemap, a whale data analysis platform, noted that the support levels for whales are at $37,834 and $36,290.

If Bitcoin falls below these key support levels, a bearish leg should be expected. The analysis stated that:

Confluence of whale supports at $37834 –> $36290. A new cluster formed yesterday in that area too. This should give BTC a nice base to take off from if we ever get there. Otherwise $39843 should provide some help too.

whalemap data on whales

The foreseeable future

From the ongoing rally, the king cryptocurrency seems to be enjoying a lot of positive sentiment. Many expect the price to surge above $60k with the current bull rally.

Scott Melker, a cryptocurrency trader, said would likely reach $63,000 following the breakout. He said:

There will be pullbacks, maybe even to retest the top of the flag as support. But technically this is a confirmed breakout that should take $BTC to 63K eventually. Disclaimer — patterns rarely reach their targets, but the rules are the rules.

At the moment, Bitcoin is looking stronger than the last time it hit $40k. There’s sufficient momentum and positive sentiment to carry it to new highs. An important factor to look forward to would be Guggenheim potentially confirming its Bitcoin investment after securing the rights to invest in the Grayscale Bitcoin Trust earlier in the month.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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