On Wednesday, April 22, Bitcoin rose to $78.4K on the Binance exchange, marking a new high since early February.
The crypto asset is now up 30% from February’s low of $60,000. According to Grayscale Head of Research, Zach Pandl, BTC may have reached a “sustainable market bottom.”
He noted that BTC has remained above $74,000, coinciding with the realized price of buyers who bought three months ago.
Bitcoin’s price is still well below October highs, but many recent buyers are back at breakeven levels, potentially signaling that Bitcoin has reached a sustainable market bottom in the $65,000 to $70,000 range.
Pandl added that if BTC rises further, more buyers would make profits, which would reduce selling pressure. According to him, this could be an indicator “marking the first phase of a bull market.”
Will Bitcoin Extend Its Rally Above $80,000?
The asset manager has joined a list of market bottom calls, from Fidelity to Tom Lee of treasury firm Bitmine Immersion.
For Lee, the ‘mini crypto winter‘ was almost over based on the recovery of the S&P 500 Index and its correlation to the sector’s previous bottoms.
In fact, the short-term outlook still looks positive, and the $80,000 level could be an insight for BTC bulls. Notably, despite the recent rally, financing rates have been surprisingly negative. Put another way, the leveraged short sellers piled in and expected a pullback.
However, such structures also accelerate a short squeeze that has driven BTC higher and could continue to do so. The next major magnetic liquidity pools with short sellers were $79.3K and $85K. These could be potential targets if the short squeeze trend continues.
But James Coutts, chief crypto analyst at Real Vision, had a contrarian view to take. According to Coutts, another decline could occur before an actual bottom in the cycle, citing a market breadth indicator that tracks more than 200 crypto assets.
79% of the top 200 crypto assets hit new one-year lows. That is higher than in June 2022. In 2022, that value was followed by another flush – and then the actual low in the cycle. No buy signal. A proximity signal.
Overall, the bottom of the market could be for Bitcoin; however, the asset could fall even lower before the recovery continues.
Final summary
- Grayscale said BTC may have pushed a “sustainable market bottom,” citing reduced selling pressure and the breakeven status of buyers who bought for three months.
- While a short squeeze could push BTC higher in the short term, one analyst warned that there was still a chance of another decline.