Bitcoin’s price rallies, but on-chain data suggests it could be short-lived
According to analysts, Bitcoin’s ongoing run is happening at a time when the currency is being “oversold” at historic levels.
- The crypto Fear & Greed Index is currently hovering in the “fear” zone.
- Senator Ted Cruz revealed that he recently acquired a “sizable” sum of Bitcoin around the $36K-$37K range approximately.
- Bitcoin’s market dominance currently stands at an impressive 40%.
Bitcoin (BTC) has started to surge once again, with the digital currency rising from a relative low of $36,400 to around $44,800 over the last 72 hours. As a result, BTC is up 12% since the month’s start, currently trading at $44,218.
Prominent analysts believe that if Bitcoin is to sustain its ongoing price action, it needs to maintain support above the $39.6K resistance. In fact, one pundit compared the currency’s ongoing price action with its performance during Q4 2020, during which BTC forged a remarkable breakout — from around the $12,000 range — to embark on a journey that saw it hit three all-time highs.
Blockchain analyst Willy Woo pointed out that Bitcoin’s price is currently at “historic levels of oversold to on-chain demand/supply.” Even futures traders have slowed their sell downs, suggesting that the ongoing surge may not be sustainable in the long run.
As per the Crypto Fear & Greed Index, a tool that is widely used to gauge industry sentiment, the market is still showcasing signs of “fear,” with the index currently hovering around a score of 33/100. The metric lay at just 25, or “extreme fear,” all through January and December 2021. So a spike of eight points shows that investors are once again warming up to the market.
Senator Ted Cruz “buys the dip”
Senator Ted Cruz, who is well-known for his pro-crypto and blockchain stance, revealed via a filing earlier this month that he had acquired Bitcoin worth $15K-$50K through a firm called River Brokerage. At the time of his purchase, the digital currency was trading between $36K and $37K.
Cruz is not the only government official to have made sizable crypto acquisitions recently. Senator Cynthia Lummis of Wyoming revealed she owns around 5 BTC late last year. Other notable individuals invested in the market include Democrats Jake Auchincloss of Massachusetts and Marie Newman of Illinois as well as Republicans Jeff Van Drew of New Jersey and Barry Moore of Alabama.
Solo Bitcoin mining seems to be the flavor of the season
Previously thought to be a near-impossible feat, instances of solo miners solving Bitcoin blocks have been on the rise, with another miner recently accruing a reward worth $240,000 approximately, or 6.25 BTC on Tuesday. According to analysts, the chances of successfully completing such a task were less than 20%.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing