With Bitcoin reaching heights not seen for months — is this really the start of the next bull run?
Bitcoin (BTC) broke through the $45,000 price point on Aug. 9 and is currently trading above it — for the first time since the drop from its all-time high of about $63,000 back in April 2021. The combined market capitalization of the crypto market is similarly reaching new highs of about $1.856 trillion after an almost three-month-long period of uninspiring sideway activity.
Is the sudden upswing a sign of the beginning of a major bull run or a brief peak on the way further down? Let’s see what’s in the news and what the crypto industry experts are saying about it.
Lack of Selling Pressure From Hodlers
An analysis by the Glassnode research studio has shown that there is little selling activity among BTC owners who are holding coins bought more than a year ago:
Despite the lackluster performance of the past few months, Bitcoin is still up around 285% from it’s $11,878 price point back in August 2020. The lack of selling pressure from investors who have already made significant gains on paper — and could easily lock them in by offloading their BTC — might signify confidence in the asset’s long-term performance and the investors’ desire to keep hodling.
Potential Resistance Line Reversal and 200MA Threshold
In terms of technical analysis, there are a couple of key indicators to watch out for when it comes to BTC right now.
First of these is the already surpassed long-term resistance line of $45,000. Crypto analyst and trader at the Amsterdam Stock Exchange Michaël van de Poppe has suggested that the line seems likely to revert to a support level, followed by upwards price action towards the target of $48,000-$49,000.
Another crucial technical indicator is the 200-day moving average (200MA), which is currently sitting at $44,982. Often working as a support level when the price is above it and a resistance level when the price is below, both values are fairly close to each other at the moment.
According to the founder of Vailshire Capital Management LLC Dr. Jeff Ross, closing the day above the 200MA will significantly help Bitcoin retain its upward momentum.
Ethereum’s London Upgrade
Bitcoin isn’t the only major cryptocurrency that is currently at a turning point between a potential bull run. Ethereum (ETH) is up more than 20% on a one-week scale amidst news of its hard fork upgrade, dubbed “London.”
The update, focused on lowering the network transaction fees and making them more predictable, is supposed to be a stepping stone on the way to Ethereum 2.0, a long-term plan to switch the cryptocurrency from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The users’ confidence in the platform’s continued progress was reflected in price action: ETH is currently trading at around $3,128, a price point not seen since May 19, 2021.
A Turning Point in the Markets?
Overall, the crypto market looks to be positioned at a crossroads. Fundamentally, there are plenty of indicators of long-term investor confidence that could result in a reversal of the hitherto downward trend. On the other hand, the technical analysis indicates that asset prices need to overcome several major thresholds and fortify above them before a bull market can resume in earnest.
Traders and investors will certainly need to follow the price action closely in the next few hours and days, as it seems likely to define the market’s performance for the next few months.
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