As we all have noticed by now, Bitcoin just had a break out from $4,1k to $4,8k in a matter of an hour. The crypto twitter is going crazy, everyone is asking for an explanation and almost everyone is super-bullish! At the moment, Bitcoin is +14% which is a view many of us haven’t seen for quite a while. Let’s look into this, what might’ve caused this, what to expect and what to do from this point on.
Broke crucial resistance point at $4,200
As we reported earlier Bitcoin had only two possible scenarios left from that point on. Whether we plunge deeper in the bear market or have a bullish breakout of the $4,2k resistance point. As we can see, the second scenario has fulfilled. Some say that Bitcoin now will be testing $5,5k – $6k in the future. If we break that resistance we’re up for a bull market. If not, we’re plunging deeper into the bear. Possibilities of Bitcoin temporary testing new highs before diving back below $4k also are in the air.
$500 million liquidated on BitMEX
As many call Bitcoin “very volatile” and some try to counter that accusation, today Bitcoin sure was volatile enough to liquidate $500 million on BitMEX alone. BitMEX is one of the most popular leveraging platforms for Bitcoin and many traders were shorting Bitcoin right and left in this bear market period. However, today’s price increase resulted in massive liquidation and BitMEX now sees almost $3 billion in volume which is 3x higher than yesterday. The price of Bitcoin even touched $5,129 at one point on BitMEX.
Fake News in the cover of April Fools
Another interesting assumption is that because of the many articles that were coming out on April Fools, trading bots algorithms started picking that up and started buying. For example, one of the news was a fake article about the SEC finally approving Bitcoin ETF. The other one was about Warren Buffet finally investing in Bitcoin. Of course, many say that such news cannot move the price of Bitcoin. Partly, I believe that statement, but when it comes to trading bots and algorithms, you can never know.
What to do now, and where is it heading?
Now is the time to find your own belief into what has happened. One thing is for sure, new money has come into crypto. Another thing is that we should see a small correction in Bitcoin’s price. The asset already has stabilized at $4,7k. If we see a correction, that could indicate a small alt-season, because people would want to take profits out of this Bitcoin rally, and that means putting them into alts. Some say that we could be testing out a new surge if $4,2 becomes the resistance.
Of course, the community is going nuts and everyone is super-bullish. People FOMO’ing left and right trying to squeeze that lemon as hard as they can. However, the feeling in the past weeks has been ever so optimistic and almost everyone is bullish. And as we know – it might as well be the opposite – once everyone is bullish on one thing – happens the other which no one anticipated.