Has Bitcoin Completed a Correction?

Cryptocurrency Market Rebounds from Wednesday’s Sell-Off, Bitcoin Targets $76K

The cryptocurrency market has been rising since the start of the day on Thursday, recovering strongly from Wednesday’s late afternoon sell-off in the wake of global financial markets. At its lowest point, the market capitalisation was down to $2.23 trillion, and at the time of writing, it had risen to $2.32 trillion (+0.1% in 24 hours). The market’s intraday movements will reveal whether this marks the bears’ last stand or if the current rebound is just a bull trap.

Bitcoin’s intraday dynamics are bullish. Wednesday’s end-of-day lows saw a flash drop below $65.5K, completing a 61.8% Fibonacci retracement of the 10-21 October rally. A quick exit to the recent highs at $69.5K would make the main scenario an extension of the upside with the potential to strengthen to $76K before further consolidation.

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According to CryptoQuant, 94% of the Bitcoin supply is ‘long’, with the median purchase price hovering around $55K. Such high levels of unrealised profits have historically served as a precursor to significant BTC corrections.

Retail demand for Bitcoin returned to pre-ATH levels in March. This contrasts with the first quarter when large players largely drove demand.

Bernstein reiterated its prediction of a $200K price for the first cryptocurrency by the end of next year, calling it ‘conservative’. BTC’s investment appeal is increasing against the backdrop of rising US government debt and the threat of inflation.

by FxPro’s Senior Market Analyst Alex Kuptsikevich