An X crypto analyst is confident that bitcoin has hit rock bottom and is set to make significant gains in the coming sessions. Interestingly, the bullish outlook depends on bitcoin's market capitalization retesting all-time highs at the time of this publication.
Will btc recover? Market dynamics are changing
So far, bitcoin price is hovering around 2021 highs in dollar terms, but it recently broke through all-time highs, reaching a high of around $73,800. This fluctuation is also reflected in its market capitalization. It currently stands at $1.25 trillion, down 5% in the last 24 hours.
Notably, it is at the same price level as in 2021, when bitcoin prices peaked, recording new all-time highs.
While optimism abounds and the trader expects steeper price expansions in the coming days, it is not immediately clear if the currency will rise, aligning with this forecast. bitcoin is volatile and has remained so despite changing market dynamics.
At the same time, unlike in the past, bitcoin prices are driven not only by retail forces but also by institutions. These institutions are regulated by the United States Securities and Exchange Commission (SEC), which also approved the bitcoin Spot Exchange Traded Fund (ETF).
This bitcoin derivative product has been the main driving force in the last ten weeks. This is by observing how prices have evolved since its approval in mid-January 2024.
However, since BlackRock and Fidelity are regulated by the US SEC, unlike retailers, they cannot act as they want. Considering the millions and billions of dollars at stake, your comments or assessments on the currency, now and in the future, can have a big impact on sentiment.
Sentiment shaken, btc faces headwinds
The feeling has been affected when writing. Even with the US Federal Reserve (Fed)'s decision to keep rates at 5.5%, the highest in 2023, lifting prices, there has been no solid follow-through in price action. The currency remains stable below $70,000.
It remains to be seen if prices will rise over the weekend. For now, however, there are some hurdles to consider.
Firstly, there has been a slowdown in inflows to spot btc ETFs. At the same time, money outflows from the Grayscale bitcoin Trust (GBTC) have increased. Secondly, after a strong rally since October 2023, a cooldown before the halving could send the coin into a downward trend.
Featured image of DALLE, TradingView chart
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