After the Russian invasion of Ukraine, Bitcoin crashed alongside other economies. But it has recovered the following two days resulting in a strong upward move. A lot of short positions were also liquidated as Bitcoin moves to $39k and tests $40k multiple times. Even though the price has been tracing back to $39k repeatedly, it seems bulls are trying really hard to reclaim the $40k support.
Bitcoin recovery
Russia waging war on Ukraine was one of the primary reasons why Bitcoin plummeted a few days back. The price almost reached $34k, and after bottoming out, the recovery began. The movement was quite fast, and it was actually surprising to see that Bitcoin was back above $38k in no time. At present, Bitcoin is trading around $39.1k and faces strong resistance between $39.5k-$40.5k. It will be essential to see if it is able to clear these levels or moves back to $38k and comes back after retesting supports.
In the last few days, around $170 million of short liquidations have also happened. This is a pretty big number and shows that the price rise was actually dramatic. However, the markets aren’t totally bullish yet, and futures still show bearish sentiment. We cannot be sure that $34k is the bottom, and this could have been a fakeout.
Future’s market
The sentiment of the markets can be understood by taking a look at the premium that it is traded for. Generally, the annual premium rates are 5-12%. Anything below 5% is considered to be extremely bearish and above 12% is bullish. The recent price action has resulted in the premium rates dropping below 5%, which is a bearish sign.
The price could actually have bottomed out at $34.4k, which is near the support of the last dip. But the global economies are in turmoil right now, and the uncertainties stemming from war could result in the price of Bitcoin correcting further. So, it is best not to get overly bullish due to the recent price action of Bitcoin. Unless Bitcoin confirms support above $40k, there is no point in being bullish in the short term.
What are your thoughts as Bitcoin moves to $39k? And do you think that the price will soon break $40k? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Ted Cruz explains his bullish sentiment on Bitcoin.
