Bitcoin (BTC) caused a sudden surge in volatility at the Wall Street open on February 20th, resulting in losses for traders. The cryptocurrency briefly surpassed the $53,000 mark before facing strong resistance and plummeting to $51,400 in just two hours. At the time of writing, there was a slight recovery with the price hovering around $51,700.
Bitcoin futures open interest, which is known to impact volatility, reached its highest level in 26 months earlier in the week, standing at over $22.5 billion. Despite the failed attempt to breach $53,000, experts believe that the overall trend for Bitcoin remains upward. Michaël van de Poppe, the founder and CEO of trading firm MNTrading, emphasized the importance of zooming out and looking at the bigger picture.
The reopening of spot Bitcoin exchange-traded funds (ETFs) on February 20th after a public holiday in the United States also played a role in the market movement. As these ETFs accumulate BTC, Bitcoin’s price tends to rise, prompting some traders to increase their exposure ahead of the Wall Street open. However, van de Poppe cautioned that ETF inflows alone would not push Bitcoin’s price to $100,000 in just two months.
The Crypto Fear & Greed Index revealed that the current sentiment among crypto traders is characterized by “greed.” This index recently reached its highest level since Bitcoin’s all-time high of $69,000 in Q4 2021.
In a positive development, a reliable bull market indicator, the Williams %R Oscillator, is signaling that Bitcoin may experience further price gains. Caleb Franzen, a senior market analyst at Cubic Analysts, pointed out that the oscillator is exhibiting similar behavior to what was observed before Bitcoin surpassed $20,000 in late 2020. Franzen had previously used this indicator to accurately predict the end of the bear market in 2022.
It is important to note that this article does not offer investment advice, and readers should conduct their own research before making any financial decisions.