During the weekend, Bitcoin recorded the largest single-day price pump of 12.5% in a single day in the last six weeks and the entire crypto market added more than $100 billion in value. The recent pump largely defies the expected bearish trend late last week, causing speculation by some analysts that it was a fake-out pump that comes before a massive fall.
For the first time since May, Bitcoin price has moved above its 50-day moving average in what is clearly a notable reverse trend. The pump saw Bitcoin price shooting to $39,850 according to CoinMarKetCap data. The crypto is now trading at $38,246, which is an additional 10% on the price in the last 48 hours. Surprisingly too, Ether also recorded a 7.9% boost in its price and on the weekend and attained a three-week peak of $2,344.
Many people expected at least a short-term bear market. As a result, many had massively betted on crypto price drops. However, many have now lost big after $1.2 billion worth of short positions were liquidated in 24 hours preceding Monday across multiple cryptocurrency exchanges.
Is This a Fakeout?
Preceding the weekend surprises, the overall trend was undecided for the entire crypto market with bulls and bears on a tough fight, according to Glassnode. Then on Tuesday, BTC price fell to a monthly low below $30,000 as regulators continued to bite hard against it. Then the Grayscale GBTC unlock was adding too many frustrations coming from limitations imposed on Binance. The bear market was growing stronger by day and which provides great evidence that the recent pump could only flatten in days if not hours.
In fact, Glassnode analysts tweeted on Friday saying that data showed most short-term holders holding coins valued significantly below the price for which they acquired them, or at a loss. Ideally, this would have created a form of selling pressure, which would obviously likely lower the BTC price. Most other on-chain metrics were not expected to prop the Bitcoin price based on the most recent analysis by Glassnode.
A crypto analyst by the name of Mr. Whale has also posted a warning alluding to the fact that the current FOMO is being propagated by maximalists who were unable to sell when the BTC price topped above $60,000 in April. As a result, they were doing everything possible to pump the price to dump.
“Over the past few months, we’ve entered a vicious bear market (tanked over 50%), and many moon boys and maxi’s didn’t get out in time. They now desperately want to sell, and will do anything to pump the prices up slightly, before jumping off the sinking ship.”
As the maximalist theory goes, Bitcoin is responding to new speculation going around crypto media houses that Amazon will begin accepting crypto payments by end of this year. The allegations are linked to an insider of the company who spoke to one media house. According to the news, the insider also revealed that Amazon would also out own platform token in 2022.
These allegations of crypto payment integration by Amazon are not proven, are likely to be untrue and a desperate promotion tactic by sheer BTC hoists according to Mr. Whale.
Nevertheless, the allegations build upon a weekend real job posting from Amazon that it was seeking to hire a “Digital Currency and Blockchain Product Lead” responsible for building the company’s digital currency strategy and product roadmap. While the job postings are true and provable, the supposed allegation to integrate crypto payments by Amazon is not.
According to Mr. Whale, this is part of what Bitcoin maximalists have been doing after the renowned crypto price peaks in April – they have made several news and announcements alleged to come from big companies, but which have been flagged as fake news. He also points out the most obvious and recent fake announcement that American banks would allow 300 million Americans to have access to buying Bitcoin this year. Then came another one that Apple had bought $2.5 billion worth of Bitcoin.
Nevertheless, a senior commodity strategist at Bloomberg Intelligence, Mike McGlone last week predicted that Bitcoin will likely revert toward the $60K handle in contrast to the $20K support range.
“Bitcoin is more likely to revert toward $60,000 resistance vs. $20,000 support if its history of recovering from similar too-cold conditions is any guide. Our graphic depicts the benchmark crypto akin to the 2018-2019 consolidation period of around $4,000, just before launching to the 2019 peak at about $14,000. The more tactical-trading-oriented bears seem to proliferate when Bitcoin sustains at about 30% threshold below its 20-week moving average, allowing the buy-and-hold types time to accumulate.”
That added to the Friday news by Tesla owner Elon Musk that there was still room for the company to accept Bitcoin payments and another from Twitter’s CEO Jack Dorsey that Bitcoin was an integral part of the company’s overall plan.