Bitcoin (BTC), saw a new spike to close to $45,000 overnight into March 27, as the weekend seemed set to bring a decisive bullish close.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Weekly close of important importance
TradingView and Cointelegraph Markets Pro data showed that BTC/USD was moving back to higher levels days before after a rejection just above $45,000.
The pair was still trading within the extended trading range, with $46,000 as its ceiling. However, it was still on the radar for long-term traders as weekly close neared. This being the most likely to be Bitcoin’s highest point of the year.
BTC/USD 1-week candle chart (Bitstamp). Source: TradingView
Rekt Capital, a popular trader and analyst, added that Bitcoin’s 21 week exponential moving average (EMA), was also poised for a flip to resistance. This is something which has served bulls well since 2021.
#BTC is positioning itself well for a breakout Weekly Close beyond a key Bull Market EMA (21-week EMA)$BTC #Crypto #Bitcoin pic.twitter.com/HmmfCkOxiP
— Rekt Capital (@rektcapital) March 26, 2022
However, not everyone was convinced by the strength of current levels. Crypto Ed, a fellow trader and analyst, cautioned that investing in long-term resistance at $46,000 per year was not a good investment.
You have to convince me that spot buying into resistance here is a bad idea. This type of R:R is not for you. While you might get an entry that is a little lower, you could also miss a severe break out and never receive your retest. Max risk is 1R Reward is 4.9R pic.twitter.com/E7wo0MC0pB
— Ed_NL (@Crypto_Ed_NL), March 26, 2022
Cointelegraph reported that others have already suggested that Bitcoin needs to experience a stronger trend breakout in order to be bullish overall and take up long positions.
Market observers are soothed by spot demand
On-chain research also revealed that spot markets and not derivatives were the dominant players in the last week.
Related: ProShares ETF’s Bitcoin stash hits $1.27B, as BTC eye $50K by mid April
This was bullish by itself, Glassnode cofounders Yann Allmann and Jan Happel said on Twitter this weekend. Historically, sustained upside has been driven primarily by spot demand.
Spot demand seems to have led the $44k move. Spot market is the driving force behind every #BTC bullish trend. pic.twitter.com/b72KYwZVLr
— (@Negentropic_) March 26, 2022
However, there was little to worry about derivatives as the funding rates remained neutral to negative despite Bitcoin’s rise towards the top.