Bitcoin Spikes 5% to $4,100 in Just 2 Hours, Analyst Says Market Turning Bullish

Within less than two hours, the Bitcoin price surged from $3,920 to $4,137 by more than 5 percent against the U.S. dollar.

The abrupt and strong performance of the dominant cryptocurrency fueled other major crypto assets in the likes of EOS, Ethereum, and Litecoin to record large gains in the range of 4 to 7 percent.

Ethereum spiked from $147 to $157 immediately after the initial price movement of Bitcoin by around 6.8 percent.

As sentiment among investors recovers, the $6 billion worth of fiat in the cryptocurrency market could gradually come back into major assets like Bitcoin, fueling a recovery.

Zu said:

“There’s an estimated $2B in cash sitting at crypto funds/holdcos. There’s another $2B+ sitting in stablecoins, and another $2B sitting at exchanges/silver gate/signature.”

“This is $6B fiat already onboarded to crypto to buy your bags. Imagine thinking we need new money to hit $10k.”

As always, there is a possibility that the entire setup from $3,122 to $4,100 is a bull trap. In the upcoming days, it is crucial for Bitcoin to maintain its momentum and volume.

Since early January, the daily volume of Bitcoin has increased from around $4 billion to $8 billion, by nearly two-fold.

If the volume, momentum, and price of BTC can hold up in the near-term, analysts foresee BTC testing the $4,200 resistance level and eventually, the $5,000 to $6,000 range.

Previously, Mark Dow, a former International Monetary Fund (IMF) economist, said that for BTC to escape a vulnerable range, it will need to rebound to $5,000 to $6,000.

“Still a beautiful chart. If bitcoin can’t bounce to at least $5k – $6k soon, it’s a really bad sign for the cyberbulls. And if it breaks down thru the yellow line at any point, even the HODLers need to GTFO,” he said.

Hence, until BTC breaks out of $6,000, it is still vulnerable to a drop below key support levels.