Indicator That Forecasted Bitcoin Rally Recently Has Flipped Bullish
The performance of Bitcoin received a boost on June 1 as it incurred an upside momentum that led to a rally from $9.5k to a high of $10.4k, representing a $900 gain in a few hours. After such a move, analysts flipped bullish on the benchmark asset.
Some market participants were expecting Bitcoin to slip following such a powerful breakout. Based on the expectations of a few traders, it slipped as it traded against the sentiment of the majority. It incurred a steep retracement thereby declining by $1,500 within three minutes and led to the liquidation of long positions valued at over $100 million on BitMEX platform.
It is clear that the majority of traders were caught unawares by the move, despite the prediction offered by an indicator, Bitfinex’s order book. At the moment, the same indicator is forecasting an upcoming upside move.
Before Bitcoin incurred the $1,500 price decline, the chart shared by Coiner-Yadox on twitter shows Bitfinex’s order book data laid on top BTC’s price action. The chart known as the top of the rally revealed that there was a barrier where Bitcoin was strongly rejected in the $10.4k range.
An updated version of the chart shows that traders on Bitfinex platform are currently supporting the price, stocking bids in the $9.5k area. If we consider the order book data’s relevance to BTC’s trend, another upside move could be imminent.
The order book data is not the only factor suggesting an imminent bullish move. There are fundamental factors that stand to boost the bullish outlook. A few days ago, Blockstream CEO Adam Back expressed two reasons for saying Bitcoin will attain $300k in the coming 5 years.
According to Back, Bitcoin is better than traditional asset classes such as bonds and real estate, claiming that bonds are overvalued and real estate is risky because people are currently working from home. Two, the value of scarce assets such as Bitcoin is being proved as governments keep printing fiat money.