The first and largest cryptocurrency, Bitcoin (BTC) has consistently been hitting new record highs. Today, Bitcoin went ahead to set historic highs of $35,868 on Coinbase. This comes barely two days after setting highs of $34,810 after which it experienced a sharp downside move to $27,678.
With this latest move, Bitcoin is up by 14.88% on a daily and 29.85% weekly while Bitcoin dominance stands at 69.5%.
Other Altcoins too recovered alongside Bitcoin with a few ones posting fresh highs. The biggest daily gainers are Cardano (ADA), Stellar (XLM), and VeChain (VET) posting gains of 30.57%, 64.02%, and 22.24% respectively. Notably, Cardano (ADA) has been on a run-up since January 2nd when it ascended from lows of $0.15.
Stellar (XLM) is up on the run due to an alliance from the Ukraine government, under which it will aid lawmakers to digitize the national fiat currency, the hryvnia. Data from monitoring resource The Tie confirms that long-term sentiment toward Stellar (XLM) is now higher than toward XRP.
BTC/USD Daily ChartBitcoin presently trades at $34,480 after reaching highs of $35,868.
Bitcoin has been on a parabolic rally since September 2020. While a parabolic rally provides king-sized returns within a short time, it also increases the likelihood of a sharp reversal that may catch many traders off guard because, after such a strong upside move, the price could retrace to any point. Bitcoin’s latest plunge to $27,678 was ascribed to filling a large futures gap, marking the biggest drop since when it reached $20k.
An analyst gives a word of caution, stating ‘Shorting a rally because it is overbought on all time frames could be a losing proposition because, during a blowoff top, the price could continue to remain overbought for much longer than most traders expect, But traders who own long positions should use proper risk management principles to protect their paper profits and not get carried away by greed’
While also stating ‘it is difficult to predict the level where the rally may end because traders continue to chase prices higher due to FOMO’
Further stating that $40,000k could be the next point of call if the resistance on the approach to $37,000 is subdued.
Bitcoin daily volume on LMAX Digital. Courtesy: Arcane ResearchAmid All These, Fundamental Indicators However Reveal Something Significant- First, the Institutional appetite for Bitcoin is increasing. Analysts at Arcane Research recently noted that the daily volume of LMAX Digital attained a record-high at $2.62 billion. LMAX is a trading platform tailor-made for institutional and accredited investors. The CME Bitcoin futures market also reached an all-time high volume at $2.7 billion.
Generally, analysts expect a sharp downside move to follow Bitcoin’s upside gains. Presently, there are no fundamental indicators that buoy this narrative as all ticked neutral to bullish. Investors now view each Bitcoin price decline as an opportunity to ‘buy the dip’.
Options put-to-call ratio remains a sure way to gauge overall market sentiment and it refers to the measure of whether more activity is going through call (buy) options or put (sell) options. In a simpler language, call options are utilized for bullish strategies, whereas put options are for bearish ones. A recent value of 0.68 put-to-call ratios indicates that put options open interest lag the more bullish calls by 32% and is therefore bullish.
Image Credit: Arcane Research, Shutterstock
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