Bitcoin Reclaims Above $63K: Reload for New Highs or Selling Surge Ahead?

Bitcoin’s market cap increased by 7% in the last 24 hours, currently trading at $63,166.72. This bullish rally surprised many traders, and they dramatically changed their positions on Binance – from liquidated short positions to long trades catching an upswing wave.

Certainly, however much optimism the surge has led to, analysts from on-chain data platform Santiment have warned about uncontrolled FOMO (Fear Of Missing Out), which can kill the sustainability of any upward trend as it is common during such times. Moderation should, therefore, be exercised if we want this rally to last longer and gain traction as well. 

📈 #Bitcoin has bounced on a #bullish Friday with its market cap rising +5.4% in 24 hours. The crowd has completely #flipflopped on their #Binance trades, going from liquidated #shorts to #longs after this bounce. For the rally to continue, we don't want to see #FOMO rising too… pic.twitter.com/fY3lEX3REb

— Santiment (@santimentfeed) May 3, 2024

Debate On Bitcoin Consolidation Above All-Time Highs

With recent price action back into play again over consolidations above ATHs, speculation on implications follows suit, too. Some analysts consider this a bullish sign, showing that the market still has more heights to reach, while others take breakdown scenarios as bearish omens, indicating possible retracements ahead of time.

Within an uptrend, periods of consolidation often manifest as patterns like flags or rectangles, reflecting a temporary equilibrium between buyers and sellers. Historically, these patterns have frequently preceded upside breakouts, acting as continuation signals for the prevailing trend.

However, the market is not without its complexities and potential pitfalls. Fakeouts within these patterns can occur, momentarily misleading traders before the price resumes its primary trajectory. Additionally, if consolidation is followed by a breakdown and failure to reclaim previous highs, it may signify distribution rather than re-accumulation.

In a strong bull market, even with bullish news and narratives, distribution can indicate buyer exhaustion, which may cause an extended retracement. Conversely, robust re-accumulation during consolidation often leads to powerful continuation upwards. Applying these scenarios to current Bitcoin’s market dynamics the crypto is at a critical point. While intraday wicks have breached the range of consolidation, the price seems ready to take back $60k before the weekly close.

If that were to happen, it would fit into a re-accumulation scenario, implying another leg up in this bull run. On the other hand, weekly closing below ATH could be seen as a bearish sign, potentially provoking a deeper pullback towards the 0.618 fib level, thus stalling the continuation of the bull market for a few months.

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