Bitcoin (BTC) saw a fresh spike to near $45,000 overnight into March 27 as the weekend looked set to deliver a decisively bullish close.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Weekly close of key importance
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD grinding back to higher levels seen days previously after a rejection at just above the $45,000 mark.
While still within its extended trading range with $46,000 as its ceiling, the pair was still firmly on the radar of long-term traders as the weekly close drew near, this being apt to be Bitcoin's highest of the year so far.
BTC/USD 1-week candle chart (Bitstamp). Source: TradingView
Popular trader and analyst Rekt Capital added that Bitcoin's 21-week exponential moving average (EMA) was also in line for a flip as resistance — something which had served bulls well in 2021.
#BTC is positioning itself well for a breakout Weekly Close beyond a key Bull Market EMA (21-week EMA)$BTC #Crypto #Bitcoin pic.twitter.com/HmmfCkOxiP
— Rekt Capital (@rektcapital) March 26, 2022
Some were not convinced of the strength of current levels, however. Among them was fellow trader and analyst Crypto Ed, who cautioned that buying into long-term resistance nearly the $46,000 yearly open made little sense in terms of risk/ reward ratio.
Try to convince me, spot buying into resistance right here is a bad idea.
You won't succeed with this kind of R:R.
You might get an entry a bit lower but you might miss also a brutal break out and never get your retest.
Max risk is 1R
Reward is 4.9R pic.twitter.com/E7wo0MC0pB
— Ed_NL (@Crypto_Ed_NL) March 26, 2022
As Cointelegraph reported, others had already argued that a more significant trend breakout was necessary for Bitcoin in order for them to flip overall bullish and take on long positions.
Spot demand soothes market observers
Meanwhile, on-chain research revealed that it was spot markets, not derivatives, that were at the helm over the past week.
Related: ProShares ETF's Bitcoin stash hits $1.27B as BTC eyes $50K by mid-April
This was bullish in itself, Glassnode co-founders Yann Allemann and Jan Happel argued on Twitter this weekend, since historically, sustained upside had been driven by spot demand.
Looks like the move to $44k was led by spot demand. Every sustained #BTC bullish move is led by the spot market. pic.twitter.com/b72KYwZVLr
— (@Negentropic_) March 26, 2022
Derivatives themselves provided little cause for concern, however, as funding rates stayed neutral to negative despite the advance towards the top of Bitcoin's trading range.