As Bitcoin breaks out of the $21k level, many crypto analysts have started projecting a further rally for the asset. One of the famous crypto strategists, Crypto Kaleo, recently gave a high price prediction for the world’s largest cryptocurrency.
Overcome over 550,000 followers on Twitter, Kaleo said BTC has prepared a rally for $30,000. Bitcoin last saw $30,000 during the bear market in June 2022. However, crypto strategists believe there will be fluctuations as Bitcoin targets $30,000, despite their bullish stance.
In his words, the market should expect more falls before Bitcoin reaches $30,000. According to Kaleo, there will be some lows below $20k, which will trigger lower positions before Bitcoin can be ready for a short squeeze.
A short squeeze occurs when a crypto trader borrows an asset at a certain price, hoping to sell it cheaply and keep the difference. These traders often use overleveraged short positions in the futures market. However, traders had no choice but to buy borrowed assets as price propulsion pushed them away, sparking another rally as market makers took in liquidity to maintain momentum.
Kaleo is confident that the short squeeze is approaching as the price of BTC has jumped above 23% in seven days.
Bitcoin Rally May Signal Increased Volatility
BTC has witnessed some bullish indicator from the beginning of 2023, to an annual high of more than $21,000. Bitcoin’s bullish rally has boosted crypto traders’ hopes that the long-running bear market may end.
There is red in it Bitcoin Fear and Greed Index to neutralwhich may lead to an increase in trading volume.
Massive increase in it Bitcoin trading volume following the recent price surge. Over the past week, Bitcoin trading volume has risen above twice its initial value, reaching $10.8 billion, an increase of 114%.
An increase in trading volume often leads to a spike in volatility. Bitcoin now the seven-day volatility level from 2.4% below the 2022 value of 3.1% but remained stable during the new general meeting. There is a possibility that the trading volume that continues to increase during the rally may lead to an increase in volatility.
The centralized exchange (CEX) has to contend with low trading volumes, which means lower transaction fees and income, including staff layoffs. Therefore, the increased trading volume is a welcomed development for BTC exchanges and traders.
Bitcoin Recovery Takes Place As Profits And Trading Volume Increases
according to Glassnode Data, on-chain realized profits for BTC return to the value of the ratio profit output spent (aSOPR) 1.0. Some analysts believe that the level of resistance is critical. ASOPR historically shows changes in the total market cycle when increasing demand (trading volume) absorbs profits.
The ratio of profit and loss realized on the BTC chain has jumped over the 1.0 mark, recording a profit of 1.56 against the loss of January 16. This marks a reversal of the downtrend that started in May 2022. An increase in the realized gain without a decrease in price shows the strength of the market.
On-chain analytics by Glassnode also show that BTC price recovery is underway. As markets absorb more selling pressure without prices falling, fears and macro changes will ease.
Technically, volatility, trading volume, and realized profits drive it BTC decoupling from equity. Bitcoin price action previously correlated with US equities.
The relationship with equity may be due to the accumulation of assets by institutional investors. The correlation has decreased now that institutional investors have less BTC and may exit the market in the near future.
Featured Images From Pixabay, Graphics From Tradingview.