Bitcoin Rises to New All-Time Highs, Generating over 20% in Weekly Returns

Within a few hours after the weekly open, more than $2 billion were liquidated across the board while BTC dropped to $27,500.00.

Sidelined investors seem to have taken advantage of the downward price action to get back into the market. As a significant number of buy orders were getting filled while prices were going down, Bitcoin was able to rebound and recover lost ground. By January 5th, at 20:00 UTC, the pioneer cryptocurrency was trading at a high of $34,490.00, surpassing the weekly open.

The upswing was interpreted as a bullish sign by many investors who rushed to exchanges to add more tokens to their positions. The considerable spike in buying pressure seen on Tuesday, January 5th, spilled over the rest of the week, allowing Bitcoin to surge more than 22%. By Friday, January 8th, the bellwether cryptocurrency had reached a new all-time high of $41,999.90, according to the exchange rate of CEX.IO.

As the weekly trading session was coming to an end, some traders appear to have booked in profits. The increase in downward pressure pushed BTC down over 3.50%. Thus, Bitcoin closed Friday’s trading session at $40,553.10, providing investors with a weekly return of 21.10%.

Ethereum Whales Go into Buying Spree, Pushing Prices Up Over 24%.

Like Bitcoin, Ethereum experienced high levels of volatility after the weekly trading session of January 4th began. The smart contracts giant jumped by more than 19%, from an opening price of $975.65 to a high of $1,165.48. Then, ETH plummeted by nearly 25% to hit a low of $973.00.

The erratic price action seen on Monday, January 4th, generated over $1.2 billion in liquidations across the board. Regardless, Ether was able to stabilize and maintain a steady uptrend as whales added more tokens to their bags.

On-chain data reveals that throughout the week of January 4th, five new addresses holding 100,000 to 10,000,000 ETH joined the network, adding fuel to the upward price action.

Given the significant increase in buying pressure, Ethereum surged by nearly 33% to hit a high of $1,289.00 on Thursday, January 7th, according to the exchange rate of CEX.IO. A considerable number of traders enjoyed the rising prices to realize profits, which resulted in a significant correction. Indeed, Ether took an 18% nosedive due to the increase in sell orders to hit a low of $1,067.00.

Ethereum was able to recover quickly after the downswing, gaining more than 14% in market value. The second-largest cryptocurrency by market capitalization closed Friday, January 8th, at a high of $1,218.17, according to the exchange rate of CEX.IO. Ether holders were able to grasp a weekly return of 24.30% due to the bullish price action.

In the Vicinity of a Correction

Despite the impressive uptrend that Bitcoin and Ethereum went through over the week, multiple technical indicators suggest that these cryptocurrencies are approaching overbought territory. For instance, the Tom Demark (TD) Sequential indicator presents sell signals in the form of green nine candlesticks on both of these digital assets’ daily charts. The bearish formations forecast a one to four daily candlesticks correction or the beginning of a new downward countdown.

If validated, BTC and ETH could be about to go through a steep correction since they have not had any significant pullbacks since the uptrend began in September 2020. A spike in selling pressure may see Bitcoin retrace to $32,000 and Ethereum towards $1,000. Only a daily candlestick close about their respective yearly highs will invalidate the bearish outlook and lead to further gains.

Konstantin Anissimov, Executive Director at CEX.IO