Bitcoin has surged back to $62,000 just days after the event dubbed “Crypto Black Monday.” Traders are highlighting a bullish trend on the seven-day price chart, suggesting that Bitcoin may have reached its lowest point.
“Bitcoin is experiencing a significant green weekly candle with a substantial wick,” crypto trader Matthew Hyland noted in an analysis video on August 8, as Bitcoin surpassed $61,000. “This is shaping up to be a major bull hammer on the weekly chart,” he added, indicating that it’s quite likely that Bitcoin has found its bottom within this entire structure.
Bitcoin has risen 7.12% over the past month. Source: CoinMarketCap
On August 8, Bitcoin (BTC) briefly peaked at $62,510 before retracting to $61,068 at the time of this report. Data from CoinMarketCap indicates that the cryptocurrency is up 12.46% since August 7.
This swift recovery follows a significant drop below a crucial support level, where Bitcoin fell to $49,751 on August 5—a day now referred to as “Crypto Black Monday.” This marked the first time Bitcoin dipped below $50,000 since February.
Some traders interpret this rapid turnaround as a potential bear trap, a tactic used by seasoned traders to sell Bitcoin in a controlled fashion, temporarily lowering its price to ensnare short-sellers. “What an incredible week. This might be the most spectacular bear trap I’ve ever witnessed,” remarked the pseudonymous crypto trader Byzantine General in a post on X.
The sentiment among futures traders has notably shifted and now leans heavily towards long positions. According to data from CoinGlass, 52.48% of positions are long, while 47.52% are short.
A considerable number of leveraged long positions could be compromised if Bitcoin dips below the critical $60,000 mark once more. Source: CoinGlass
This news comes just a day after Morgan Stanley, the largest wealth management firm in the U.S., permitted its 15,000 financial advisers to start recommending Bitcoin exchange-traded funds (ETFs) to their clients.
Related: Bitcoin’s decline resembles the onset of the 2016 bull run — Peter Brandt
However, not all crypto analysts are convinced that the bottom has been reached. Some predict additional declines may occur before Bitcoin achieves new all-time highs. On August 7, Markus Thielen, the head of research at 10x Research, stated that “to optimally time the next bull market entry, we are looking for Bitcoin prices to dip into the low $40,000s.” Similarly, Timothy Peterson, founder of Cane Island Alternative Advisors, suggested that both $40,000 and $80,000 are equally plausible in the next two months.
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This article does not provide investment advice or recommendations. All investment and trading activities carry risks, and readers should perform their own research before making any financial decisions.