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Bitcoin registers strong bounce to $47,000 recovering all the losses from 2022

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28
Mar
  • Bitcoin and the broader crypto market have shot by 5 percent resulting in major short liquidations.
  • Bitcoin is trading well above its 50 DMA signaling strength and is on its way to cross 200 DMA to confirm the bull trend.

After nearly months of strong volatility, Bitcoin (BTC) has finally recovered all its losses for the year 2022. Earlier today, Bitcoin gained another 5 percent moving past $47,000 for the first time since January 4. As of press time, Bitcoin is trading at $46,960 with a market cap of $890 billion.

The current trading price is quite critical as Bitcoin manages to give a bullish crossover over the MACD like on a daily closing basis.

All eyes will be on the next important resistance i.e. the 200-day moving average (DMA) which is currently at $48,278. Beyond these price levels, Bitcoin will set up the case for the next bull run. Holger Zschaepitz, the crypto market analyst at Welt writes:

Bitcoin has made another comeback! Cryptocurrencies stealth rally over the past 2 weeks not only pushed it past a key level of $45k – it also put the world’s biggest cryptocurrency back in positive territory for the year.

For the last few weeks, BTC was hovering in the range of $35,000-$45,000. The recent breakout shows that bulls are back in the action once again. Nexo co-founder and managing partner Antoni Trenchev said:

As we test the top of the 2022 trading range for the fifth time, this is another one of these Bitcoin moments when the narrative could swiftly change and investors pile in, propelling the Bitcoin price higher. It might just be time to awaken from the Bitcoin-sideways slumber that’s been 2022.

Bitcoin’s overbought range

Bitcoin now has been trading well above its 50-day moving average (DMA) which is currently at $41,000. As per Bespoke Investment Group, this puts Bitcoin at the 80th to 90th percentile and in the “overbought” range.

But Bespoke notes that although this signals for a downside, for BTC, it has been historically the opposite. In its reports, Bespoke mentions:

When it has been similarly overbought in its past (over the past five years), it has averaged significant gains going out one to 12 months. This isn’t normally what you see for the typical stock or ETF (exchange-traded fund), but because Bitcoin has mostly traded higher over the years and really has a lot of momentum trading behind it, overbought levels have yet to become a headwind for this particular space.

As per historical trends, whenever BTC has been on the month’s decline against its spread, it has surged 16 percent over the next month. It further surges 100 percent in the next six months and more than 274 percent a year after.

As per on-chain data provider Santiment, the market fear around war, inflation and COVID-19 has eased up significantly. Furthermore, the recent price surge has resulted in massive short liquidations.

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