Crypto fans were in high spirits on Wednesday as bulls took control of the price action and powered Bitcoin higher, helping to boost the total cryptocurrency market capitalization back above $1 trillion while the traditional markets fell under pressure and snapped their 3-day winning streak.
A volatile day in the stock market resulted in lower prices on the day following weak earnings reports from Alphabet and Microsoft, which sparked fresh concerns that the economy may continue to weaken in the coming months.
Data from TradingView shows that Bitcoin (BTC) saw its second day of gains, briefly cresting above $21,000 to hit a daily high at $21,026 before retracing back to support near $20,700, where bulls look to gather their strength before pushing higher.
The shift in momentum over the past two days was touched on by Kitco senior technical analyst Jim Wyckoff, who noted that Bitcoin price “hit a six-week high in early U.S. trading Wednesday.”
“Price action this week has seen a big and bullish upside ‘breakout’ from the choppy and sideways trading range of the past few weeks,” according to Wyckoff, who added that “A fledgling price uptrend is now in place on the daily bar chart.”
The sudden move higher has put bears on the defensive as “Bulls now have the firm near-term technical advantage,” with the current momentum suggesting that there is “still more upside price action in the near term,” Wyckoff concluded.
As for traders who think that Wednesday’s move higher is a signal to go all in as it is “only up from here,” market analyst Rekt Capital posted the following chart and provided a little historical insight to help bring those hopes back down to earth.
“Though it may be easy to get excited about this recent uptick in BTC’s price action… Macro-wise, BTC is still in its historical bottoming area & hasn’t registered a major breakout yet,” Rekt Capital warned, adding that “BTC would first need to break ~$23450 to see stronger trend acceleration.”
Shorts get crushed
The one cohort of crypto traders that didn’t welcome the sight of green across the board on Wednesday were derivatives traders, who have suffered $757 million worth of liquidations on Bitcoin alone over the past 24 hours, according to data provided by Coinglass.
Across all cryptocurrencies, the total amount liquidated in trading on Wednesday was $1.43 billion, which added to what was already the highest tally in 2022 so far.
An additional warning that today’s move doesn’t mean that its blue skies from here on out was provided by crypto analyst il Capo of Crypto, who posted the following tweet alerting traders to the possibility of a short squeeze that could soon reverse course.
A tale of two markets
The trend of stocks trading higher while cryptos languished came to an end on Wednesday as the majority of altcoins in the top 200 saw gains on the day while the major stock indices struggled.
At the close of markets in the U.S., the S&P and Nasdaq both finished in the red, down 0.74% and 2.04%, respectively, while the Dow managed to eke out a slight gain of 0.01% after being up as much as 1.4% earlier in the day.
The top altcoin Ethereum (ETH) climbed 6.6% higher to trade at $1,561, while the popular meme token Dogecoin (DOGE) saw an increase of 15.03% to trade at $0.072 at the time of writing.
Other notable altcoin gainers include a 24.3% upsurge for Illuvium (ILV) and a 15.7% increase for Toncoin (TON).
The overall cryptocurrency market cap now stands at $951 billion, and Bitcoin’s dominance rate is 38%.
