Why Everyone is Bullish on Bitcoin Again
Just like that, it seems everyone is bullish on bitcoin again.
Another strong surge during the Asian session today brought us to a new high of $5,622 a coin, the highest level since November’s capitulation.
Sure, there are a load of bullish signs right now (we’ll get into some of them below) but if you’re asking what caused this morning’s movement, you might be slightly disappointed as there doesn’t seem to be any specific catalyst for this. It seems simply to be a shift in outlook.
During the bear market, there were a lot of people who sold their crypto in fear of lower prices. Those people didn’t really go away though, they’re simply standing on the sidelines waiting for the return of a bull market…
eToro, Senior Market Analyst
No More Iranian Oil
Bitcoin Golden Cross
More Bullish Than Ever
Please note: All data, figures & graphs are valid as of April 23rd. All trading carries risk. Only risk capital you can afford to lose.
Earning’s season continues, with several dozen companies reporting today. It’s still too early to get an indication of the overall environment but there haven’t been too many disasters so far. We’ll need to watch closely over the next two weeks. Today, all eyes are on Twitter.
Crude oil is also in focus after President Trump ramped up sanctions on Iran.
As we know, Trump has been rolling back the Iranian sanctions that were eased by Obama. Until now, he’d given permission for several countries to continue dealing with them, those permission slips have all been revoked now.
The main focus of the market seems to be how Saudi Arabia will respond. It’s pretty clear that they’re in favor of this move because Iran is a mutual adversary both geopolitically and businesswise in the oil industry.
The question is if they will increase oil production to make up for the lack of Iranian oil on the market. Many analysts think that this is a possibility in the future, but not right now. It certainly pays for them to be patient and let the price continue to rise a bit before testing the waters with any production increases.
Bitcoin’s Golden Cross
The latest indicator for bitcoin comes from the moving averages, which have just shown a very bullish pattern known to technical analysts as a Golden Cross.
This occurs when the average price in the short term rises above the long term average price. Here we can see the 50-day moving average (red) rising above the 200-day moving average (blue) for the first time since 2015.
Some people will want to wait until today’s close for confirmation but in my mind, this box is ticked.
Following the extraordinary surge on April 2nd, many people were looking for some sort of continuation and now that we’ve broken the interim resistance of $5,350 it seems we have one.
Korean Come Back
One of the most active cryptotrading nations has just shown signs that they are all-in on this current rally. According to a recent survey by the Korea Financial Investors Protection Foundation, citizens of South Korea are now more bullish than ever.
The average SK hodler has invested $6,097, which represents a 64% increase from a year earlier!!
In contrast to most of the rest of the world, it seems that older people have a larger propensity to crypto investments with people in their 50s showing an average investment of $11,000 per person.
Due to recent allegations of wash trading in the market, it’s going to be very difficult to get any sort of reliable data to map out South Korean volumes, so the above survey of 2,500 people is really the best indication we have.
Also worth noting is that there doesn’t seem to be any kimchi premium this time around as the liquidity of the market has improved drastically over the last two years.
During the 2017 bull run, it was normal to see bitcoin’s price in South Kora a good 20-30% above the rest of the market. Very glad to report that today, while South Korean exchange bithumb is slightly above the pack, the premium is only about 1%.
Let’s have a wonderful day ahead!
Senior Market Analyst
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