When Bitcoin above the $21,000 level, many crypto analysts have started forecasting further rallies for the asset. One of the famous crypto strategists Crypto Kaleo recently gave a high price prediction for the largest cryptocurrency the world.
Addressing its over 550,000 Followers on TwitterAccording to Kaleo, BTC is preparing for a rally to $30,000. Bitcoin last recorded $30,000 during the June 2022 bear market. However, the crypto strategist believes there would be volatility if Bitcoin targets $30,000 despite taking a bullish stance.
He said the market should expect more declines before bitcoin hits $30,000. According to Kaleo, there would be a few lows below $20,000 which would trigger lower positions before bitcoin can be ready for the short squeeze.
A short squeeze occurs when crypto traders borrow assets at a certain price in hopes of selling them lower and keeping the difference. These traders often take excessively leveraged short positions in the futures market. However, traders would have no choice but to buy the borrowed assets as the price drive pushes against them, sparking further rallies as market makers take out their liquidity to maintain momentum.
Kaleo is confident that the short squeeze is approaching as the BTC price is already up over 23% in seven days.
Bitcoin rally could signal increased volatility
BTC has experienced several bullish indicators since early 2023, hitting a yearly high of over $21,000. Bitcoin’s bullish rallies have boosted crypto traders’ hopes for an end to the protracted bear market anytime soon.
There was a reduction in Bitcoin Fear and Greed index to neutralwhich could lead to an increase in trading volume.
A massive increase Bitcoin trading volume followed the recent price increase. Over the past week, bitcoin trading volume has more than doubled its original value to reach $10.8 billion, up 114%.
Bitcoin Trading Volume, Source: Arcane Research
An increase in trading volume often leads to an increase in volatility. Bitcoin is current 7-day volatility level 2.4% is down from 2022’s 3.1% but has held steady during the recent rally. There is a likelihood that the ever-increasing trading volume during the rally could lead to an increase in volatility.
Centralized exchanges (CEXs) have struggled with low trading volume, which means lower transaction fees and revenues, including staff layoffs. Therefore, the increasing trading volume is a welcome development for the exchanges and BTC traders.
Bitcoin rally underway as realized profit and trading volume increases
After data from Glassnode, On-chain realized profits for BTC return to the Adjusted Value of Earnings Output Ratio (aSOPR) of 1.0. Some analysts believe this is the critical resistance level. The aSOPR historically indicates a shift throughout the market cycle as rising demand (trade volume) absorbs profits.
BTC’s on-chain realized win-loss ratio has jumped above the 1.0 mark, posting 1.56 gains versus Jan. 16’s losses. This marked a reversal of the downtrend that started in May 2022. An increase in realized profit without a decline in price indicates market strength.
On-chain analysis from Glassnode also suggests that a BTC price rally is underway. As the market absorbs more selling pressure with no price pullback, the general fear and macro shift will diminish.
Technically, volatility, trading volume and realized profits all push BTC decoupling from stocks. Bitcoin’s previous price action correlates with US stocks.
Bitcoin price hovers above $21,000 l BTCUSDT on Tradingview.com
The correlation to stocks could be due to wealth accumulation by institutional investors. Correlation has decreased as institutional investors hold less BTC and could exit the market going forward.
Featured image from Pixabay, charts from Tradingview.
Source: Crypto News Deutsch