Bitcoin’s Weekend Recovery Doesn’t Mean Downfall Is Over – Bitfinex

Bitfinex analysts have warned crypto investors to be cautious, as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.

In the latest Bitfinex Alpha report, experts considered the market reaction critical this week, especially as the eased supply over the weekend could return when traditional markets open.

“No Man’s Land”

Since Saturday, bitcoin has risen nearly 10% from $57,600 to $63,000, closing last week in the green. The asset has risen above the $60,200 low of the 125-day range, which it surpassed earlier this month after news of the German government’s massive BTC sale hit the market.

Market sentiment started to improve after German government-linked portfolios were almost empty. However, the positive sentiment may not last long as the BTC that the German authorities moved to trading desks and exchanges has yet to sell.

While the supply from Germany appears to have factored into the bitcoin market price, Bitfinex analysts believe that the end of the selling pressure depends on how the trading desks involved execute their trades in the next few days

While the shift in sentiment underscores the market’s ability to integrate new information and adjust expectations quickly, analysts think the market’s reaction during the first two trading days of the week cannot be overlooked for two reasons.

First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends tend to be favorable for markets, especially Saturdays, when supply pressure appears to be easing.

“We are now in no man’s land until we get a clear resolution above or below this level,” the analysts said.

A news driven environment

In addition to the potential resistance level and the three-month weekend trading pattern, the market is currently in a news-driven environment where cryptocurrency prices have been driven by news agendas rather than fundamentals .

Since the selling pressure issues are not yet completely obsolete due to the upcoming Mt Gox creditor distributions, Bitfinex analysts expect these holders to continue to have some impact on price movements. As such, analysts urged investors to exercise caution in their trading strategies.

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