Bitcoin Thrives: What’s Behind BTC Bounce To $24,000? This Analyst Says

In the financial crisis that has engulfed the U.S. banking system and the global economy, Bitcoin (BTC) thrived over the weekend. The cryptocurrency surpassed the $23,000 level and seems poised to take by storm the lost territory at $25,000. 

After filling the Chicago Mercantile Exchange (CME) gap at $19,800, BTC has managed to bounce with strength. The current price action caught the bears off guard and liquidated short positions totaling over $300 million in the last 24 hours. 

For BTC investors, Bitcoin has served its purpose while the traditional U.S. system has been caught in the crossfire of the Federal Reserve (Fed) and inflation rates in its mission to avoid a recession.

Signature Bank, Silicon Valley Bank, and Silvergate Capital are among the victims of the hawkish inflationary policy. But what are the keys to the price action that Bitcoin is currently experiencing? Crypto analyst Adrian Zdunczkyk weighs in.

Critical Reasons Behind Bitcoin’s Rally 

According to Adrian Zdunczyk, the price of Bitcoin has retraced 20% from the peak of $25,000. The analyst believes this confirms a local breakdown that does not affect BTC’s long-term shift but could hint at a correction. The 200-day mean trend moved sideways regardless of the drop below $20,000.

For the analyst, BTC’s current price movement is a long-term accumulation zone between the $15,500 and $25,200 levels. The bulls seem to be in charge now that the $21,700 level has been taken with high conviction by investors following the ongoing global meltdown of traditional markets.

The 200-day mean trend has acted as a “magical” support at $20,000, which the bulls have quickly regained, providing a perfect opportunity for investors if another correction is coming. On this possibility, Zdunczyk said:

The 9-year seasonal review suggests that March is consistently a bearish and losing month. With -64.39% annualized return and only 33.33% winning trades, BTC investors should not put much trust in this month being bullish.

On the contrary, the 11-year “Sell in May and Go Away” pattern proves “favorable odds” for traders on the April-May price action, as the annualized return of over 72% on winning trades over this period historically provides an “optimistic outlook for the next two months,” according to Adrian.

Despite this forecast, a good Consumer  Price Index (CPI) print for February, and no rate hikes above 25 basis points by the Fed, could ignite a significant uptrend for the most prominent cryptocurrency on the market.  

A break above $24,000 and further consolidation in the previously lost zone is significant for BTC as it is at a critical area. The cryptocurrency is trying to break the resistance wall it failed to break four times before the correction below $20,000. 

Currently, Bitcoin is trading at $24,100, which represents a significant gain of 19% in the last 24 hours. In the seven-day time frame, BTC has regained its ground with a profit of 8.9%.

Featured image from Unsplash, chart from TradingView.com