Bitcoin price was stuck at lows around $30,000 for what felt like months on end, and finally had a big bullish breakout in recent days. The leading cryptocurrency by market cap broke out through downtrend resistance on high volume, and quickly shot up by more than $10,000.
The current low for the year was a correction back down to the yearly open, at around $28,000. With a huge wipeout now out of the way, and the crypto market trending back up, could Bitcoin be ready for another full bullish wave?
What Happened To The Crypto Market Bull Run?
From the Black Thursday post-pandemic lows set around $3,800, Bitcoin price went on to have its greatest rally on record on a dollar per dollar basis. The top cryptocurrency by market cap quickly blew past its former 2017 all-time high in late 2020, reaching nearly $30,000 to end the year with a bang.
Once Bitcoin set a new high, it sent the cryptocurrency market into overdrive, and altcoins everywhere like Dogecoin and Ethereum also exploded to new record highs. The market became ultra-exuberant, and expected a supercycle in crypto to play out. Very few took profit near highs, as the price per coin reached around $65,000 at the time Coinbase Global was listed on the Nasdaq.
Everything looked to be going too good to be true for crypto, and it was. Right after the Coinbase stock market debut, the rug was pulled on investors and cryptocurrencies collapsed by more than 50% across the board. Bitcoin dropped from $65,000 to $28,000 at the low, and trended sideways for several weeks as the market became too shaken to jump back into a position.
Bear Wave Ends, But Is Bitcoin Ready To Recover?
The market looked heavily poised for another fall, which prompted short positions to pile up against Bitcoin. Shorting Bitcoin is a speculative bet that expects the price per BTC to decrease, and allows traders to profit off that price difference. Shorting Bitcoin can be more profitable than normal spot trading and be a tool that can protect capital, but not in this case.
With sentiment so bearish, the market unable to break through support, and tons of shorts to squeeze, the market then reversed with furious buying that helped to force shorts to cover and squeeze prices higher.
Bitcoin blasted off like a rocket ship from $30,000 to $40,000, reviving talk of another bullish wave. If a bullish wave is indeed here, it could be the last one before the peak is finally in on the current bull market. Getting the timing right is crucial, but how does one prepare?
Volume Arrives With Breakout, Technical Suggest More To Go
The very first thing to look for, is volume, and that much thus far is clear. Bitcoin broke out from downtrend resistance with volume, and rose from $30,000 to $40,000 in a massive 25% recovery. A strong rejection took place at the top of the range, but with no more downtrend resistance, Bitcoin could shoot even higher.
Bitcoin price also closed outside the top Bollinger Band on the daily, which could suggest that the cryptocurrency is about to “ride the bands.” The “riding the bands” strategy uses a close outside of the Bollinger Bands combined with high volume as a signal to go long and keep riding the bands.
Going long at any pullback is the best decision and keeps stop losses at a far enough distance away so that they don’t get run unexpectedly in a wick. Bitcoin could rally until the RSI reaches overbought conditions, and so far the cryptocurrency is far from done. Reclaiming the Ichimoku cloud on daily time frames would be further confirmation that more highs are on the way.
What Targets Could Bitcoin Price Reach This Wave?
If Bitcoin does recover further, it has a lot of resistance left to deal with. Resistance levels also rest at around $42,000, $48,000, and $56,000. Final resistance broken above $65,000 should mean that closer to six digit Bitcoin is on the way.
Bitcoin price predictions for the top of this cycle reach upwards of $100,000 to half a million per coin. Prediction models like the stock to flow model suggest that Bitcoin is undervalued at current levels. Going long on a margin trading platform like PrimeXBT if this indeed the bottom could be a game changer.
Long and short positions on CFDs for cryptocurrencies like Bitcoin give traders enormous flexibility. If you’re interested in gold trading or oil and natural gas for example, there’s traditional assets also. The platform includes technical analysis software so traders will know when and where to go long, and which levels to take profit at if Bitcoin is back to another bullish wave.
What Happens If Things Turn Bearish Instead?
Bitcoin price may or may not have completed its most recent bull cycle, and the market will soon find out if the wave brewing now ends up leading to another tsunami of ROI when the cryptocurrency market begins trending again.
The market already saw a massive loss of more than 50% so any further downside may be limited, that leaves mostly upside for traders to deal with, which is why another bullish wave is possible with a proper reversal brewing.
We’ve talked extensively on what to do if another bullish wave arrives, but what if things turn bearish? Although the most recent set of traders who went short were liquidated in the largest Bitcoin-related short squeeze ever, shorting will become a valuable tool if the crypto market turns fully bearish again.
The last time this happened, Bitcoin spent years trading at lows, with very few bull rallies that mostly offered sellers a chance to get out higher. And with Bitcoin failing to meet the expectations that holders had if the bear market is here now, it could become the worst bear market on record due to a record number of people being shaken out.