Crypto analysis of March 05, 2024: Bitcoin goes crazy and drags the entire market

Bitcoin closed the past week around $63,000 and starts a new week in the positive. Let’s examine the future outlook for BTC price together.

Bitcoin Situation (BTC)

The Bitcoin price continued its upward movement to reach the psychological threshold of $60,000. At this level, it began a phase of consolidation by forming a symmetrical triangle, which was subsequently broken upwards, propelling Bitcoin directly towards $68,800, just $200 shy of its all-time high. Concurrently, Bitcoin’s market capitalization surpassed its previous record, reaching $1,350 billion. For comparison, the market capitalization of META (formerly Facebook) stands at $1,270 billion as of the publishing date of this article. Reaching such a high market capitalization, along with a price nearing its all-time high (ATH) before the halving, is a first for Bitcoin.

Although BTC has experienced a slight market decline, bringing it below $66,000, its overall trend remains bullish. It is important to note that Bitcoin’s price has distanced itself from its 50-day moving average, indicating a period of high volatility that could be corrected soon. Regarding market dynamics, it is not surprising that they are perceived as positive. This is particularly evident from the oscillators, which even suggest that an overbought period might be underway.

The current technical analysis has been conducted in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of proprietary traders active since 2017. There you will find Lives, educational content, and support around financial markets in a professional and friendly atmosphere.

Focus on Derivatives (BTCUSDT)

We can observe that the open interest of BTC/USDT perpetual contracts has increased alongside its price, accompanied by a positive funding rate and predominantly seller liquidations. All these elements suggest that traders’ speculative interest is mainly oriented towards buying. However, it is important to emphasize that the funding rate is significantly positive, suggesting that the price of the perpetual BTC/USDT contract is higher than the BTC spot market price. This gap may reflect increased optimism in the derivatives market. As positive as this may seem, a too high funding rate over an extended period can also indicate that the market is in an overbought phase. Thus, a rebalancing is desirable for a healthy continuation of the trend.

The liquidation heatmap for BTC/USD currently indicates that the closest liquidation zones to the current price are below it. Notably, the $61,000 level, and then, at an even lower level, the $50,000 threshold, which is particularly significant. As the market approaches these levels, we could witness a massive triggering of orders, potentially increasing the volatility of the cryptocurrency. These zones therefore represent major points of interest for investors.

Possible Scenarios for Bitcoin Price (BTC)

• If Bitcoin price manages to hold above $60,000, we could envisage another rise to its ATH, that is around $69,000. Beyond that, the next resistance would be theoretical, but by using Fibonacci extensions, the $80,000 level could be considered as corresponding to the 100% extension. If the bullish trend continues, levels of $95,000 or even the symbolic threshold of $100,000 could be in sight. Reaching the latter would mark an increase of about +50%.

• If Bitcoin price fails to maintain above $60,000, we could expect buyer interest support from the zone around $58,000 or $57,000. The next level to consider if the bearish movement continues would be around $52,000. At this point, it would represent a drop close to -22%.

Conclusion

Bitcoin has reached a record capitalization and is now a few dollars off its all-time high (ATH). Although there is no indication that Bitcoin’s momentum will stop, it is important to note that a correction could legitimately be considered after such volatility and at this price level. Thus, it will be crucial to closely observe the price’s reaction to different key levels to confirm or invalidate the current hypotheses. It is also important to stay vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria and that cryptocurrency prices may also evolve quickly based on other more fundamental factors.