As Bitcoin breaks out of the $21k level, many crypto analysts have started projecting more rallies for the asset. One of the famous crypto strategists, Crypto Kaleo, recently gave a high price prediction for the world’s largest cryptocurrency.
Addressing its more than 550,000 Twitter followers, Kaleo says that BTC is preparing for a rally to $30,000. Bitcoin last saw $30,000 during the bear market in June 2022. However, the crypto strategist believes that there will be fluctuations as Bitcoin targets $30,000, albeit bullish stance from him.
In his words, the market should wait for further declines before Bitcoin reaches $30,000. According to Kaleo, there would be some lows below $20,000, triggering lower positions before Bitcoin can be ready to short.
A short squeeze occurs when cryptocurrency traders borrow assets at a certain price, hoping to sell them at a lower price and keep the difference. These traders often use over-leveraged short positions in the futures market. However, traders would have no choice but to buy the borrowed assets as price propel pushes them, sparking more rallies as market makers pull out their liquidity to maintain momentum.
Kaleo is confident that the short crunch is coming as the BTC price has already topped 23% in seven days.
Bitcoin Rally Could Indicate Higher Volatility
BTC has witnessed several bullish indicators since early 2023, taking it to a yearly high of more than $21,000. Bitcoin’s bullish rallies have raised cryptocurrency traders’ hopes that the long-running bear market could end soon.
There has been a reduction in the Bitcoin Fear and Greed Index to Neutralwhich could cause an increase in trading volume.
A massive increase in Bitcoin trade volume followed by the recent price hike. Over the past week, Bitcoin trading volume has risen by more than double the initial value, reaching $10.8 billion, an increase of 114%.
An increase in trading volume often leads to an increase in volatility. bitcoin stream seven day volatility level of 2.4% is below the 2022 value of 3.1%, but held steady during the recent rally. There is a chance that the ever increasing trading volume during the rally could cause an increase in volatility.
Centralized exchanges (CEXs) had to struggle with low trading volume, which means lower transaction fees and revenue, including staff layoffs. Therefore, the increase in trading volume is a welcome development for BTC exchanges and traders.
Bitcoin recovery is underway as realized gains and trading volume increase
According to glassnode data, On-chain realized gains for BTC revert to the Adjusted Spent Production Earnings Ratio (aSOPR) value of 1.0. Some analysts believe that it is the critical resistance level. Historically, the aSOPR indicates a change in the total market cycle when increasing demands (trading volumes) absorb profits.
BTC’s on-chain realized win-loss ratio has broken the 1.0 mark, posting gains of 1.56 versus losses on Jan. 16. This marked a reversal of the downtrend that began in May 2022. An increase in realized profit without a price drop indicates market strength.
Glassnode’s on-chain analytics also suggest a BTC price rally is underway. As the market absorbs more selling pressure without a drop in price, general fear and macro change will subside.
Technically, volatility, trading volume, and realized gains are pushing Decoupling of BTC from shares. Bitcoin’s previous price action correlates with US stocks.
The correlation with stocks could be due to the accumulation of assets by institutional investors. The correlation has dropped now that institutional investors hold less BTC and could exit the market in the future.
Featured image from Pixabay, Charts from Tradingview.
