Bitcoin price drop to $37K has analysts wary of calling it a ‘trend change’
Bitcoin’s price sold off below $37,000 shortly after topping $40,500, leading analysts to caution that bears still have a few tricks up their sleeves.
Bull market optimism returned to the cryptocurrency market on Monday after Bitcoin’s (BTC) price rallied above the $40,000 level for the first time in over six weeks.
Monday’s rally to $40,581 was a continuation of Sunday’s breakout that saw BTC’s price rocket to $48,110 on Binance after a short squeeze resulted in nearly $500 million in shorts being liquidated in just two minutes.
Data from Cointelegraph Markets Pro and TradingView shows that BTC spiked to an intraday high at $40,581 on Monday before pulling back to $37,500 as bulls looked to flip this resistance zone back to support in preparation for a further move higher.
While the move higher has the mark of a trend change and has prompted some analysts to proclaim the bull market is back on track, on-chain data and the perpetual funding rates do not fully concur with this point of view — especially when one considers that the current breakout may have only been the result of a massive short squeeze.
Factors that could reignite the bull market
According to Élie Le Rest, partner at digital asset management firm ExoAlpha, the recently denied rumor that Amazon would accept cryptocurrency payments have the potential to have a similar effect as the 2020 revelation from PayPal that it would integrate cryptocurrencies. Le Rest said that if the Amazon news turns out to be true, this “could be the catalyst to ignite a bull run in H2 of 2021.” If Bitcoin is able to maintain its current momentum, Le Rest said, “as many expect, Bitcoin could get back on track with the Stock to Flow model and reach the $100,000 mark by year-end.”