After weeks of hoping, it finally happened: Bitcoin has printed a higher high, blasting through the key $46k resistance level.
The questions we need to be asking are: What caused this late-night price action? Will it hold? And is this upside movement just the beginning?
- Bitcoin closes the day above $46k.
- Fear and greed Index highest since November.
- Luna Foundation Guard kickstarts leg up.
At approximately 21:35 UTC last night, bitcoin printed a bullish five-minute candle of +3.03%, launching its price from US$44,990 to US$46,733 in under 5 minutes, achieving a crucial daily close at US$46,820.
This impressive move cemented a much-needed higher high, taking BTC past the key level that, according to the majority of technical analysts, had to be reclaimed for any talk of a “‘bull market’ to be taken seriously.
Negentropic shared data from Glassnode, indicating that this rally was led by heavy spot buying.
The Fear and Greed Index is now sitting at 60 – Greed. This is the first time the indicator has reached this level since November 16, 2021. Any sustained price action that takes BTC over US$50k could start to trigger serious fear of missing out (FOMO), creating the condition for retail investors to start aping in.
Is Terra’s Do Kwon the bitcoin savior?
Is Do Kwon single-handedly dragging BTC back into bull-market territory?
We have carefully been monitoring the Luna Foundation Guard (LFG) and Do Kwon’s BTC purchases. The foundation stated that it would be purchasing as much as US$3 billion in BTC to sure up the UST reserves, but nobody (apart from those involved) can be quite sure at what point the buying will stop.
Is it possible that we’re becoming over reliant on a single entity to drive price action in a market with otherwise little volume?
The market has needed a catalyst for some time, and Do Kwon could be providing it at the perfect moment. Not only has his conviction literally pumped the price, it has also served to instill wider confidence in the market. Further, it could provide the perfect conditions to change Bitcoin’s course in the weeks and months ahead. Even without any further US$125 million purchases incoming, and who knows when the next will be, bitcoin needs only to break through the resistance level in the US$50k region for a clear shift in narrative, which could trigger a cascading effect of institutional and retail interest.
Do Kwon and the LFG have been acting as a kind of unnatural player in the market, and it’s hard not to be reminded of TESLA’s announcement of its US$1.5 billion BTC buy back in February 2021, which triggered a rally that took bitcoin all the way up to setting an all-time high of $64k.
Right now, with so little retail interest, it’s fairly simple: prices go up, FOMO builds, retail buys. Whether it was Do Kwon sustaining the upwards momentum is immaterial: Any price action is being sustained by buying, irrespective of who’s actually doing it.
In the meantime, bitcoin has printed a higher high, a crucial step towards a meaningful reversal. It’s the kind of technical signal traders pay close attention to, and the next leg up could be the moment retail starts to return.
Does that mean you should be buying? Of course not. If you’ve been paying attention, you bought when bitcoin was in the low- to mid-thirties, ever since we broke the trend at the beginning of February. For now, we observe – and wait for the pullback!