With Bitcoin briefly surpassing $97,000, all eyes are now on the coveted $100,000 mark. Delve into the key drivers behind this surge and explore the technical signals driving the momentum.
Bitcoin (BTC) experiences a new bullish push on May 7th. Its price surpasses $97,000, with a significant 37% increase in daily transaction volume. This surge can be attributed to several key factors:
Investors seem to be betting on a potential resumption of trade negotiations between China and the United States, following an announcement by U.S. Treasury Secretary Scott Bessent of his intention to travel to Switzerland to meet with a Chinese delegation.
This prospect of geo-economic easing logically boosts risk appetite in financial markets, including digital assets like Bitcoin. However, caution is advised as the likelihood of an agreement by June is currently only estimated at 25% by the prediction platform Polymarket.
The price surge is accompanied by a phenomenon familiar to seasoned traders : the liquidation of short positions. In a span of 24 hours, over $83.6 million of short positions were liquidated, compared to just $15 million of long positions.
These forced buybacks mechanically exacerbate price increases. A similar leverage effect was observed at the end of March, with $122 million of short positions liquidated during the same period.
Technically, Bitcoin continues its bullish breakout from a descending “wedge” pattern, a traditional reversal model. The price has notably reclaimed its major moving averages and the yearly opening at $93,000.
The next key resistance is at $98,000. Once surpassed, Bitcoin could soar towards $100,200 in the short term. Only a close below $93,000 could temporarily push prices back to the $87,000 to $90,000 range.
Beyond current factors, the underlying trend remains favorable for Bitcoin. Moreover, the bullish momentum is supported by a positive chart pattern, massive short position liquidations, and increased interest from institutional investors.
The attainment of the symbolic $100,000 mark appears increasingly plausible, provided the resistance zone at $98,000 is overcome. However, decisions from the Fed or developments in Sino-American negotiations must be closely monitored.
For crypto investors, caution is advised despite this upward momentum. It is strongly recommended to conduct thorough research before committing to market positions.
Gaston has been a writer for over 7 years and a passionate cryptocurrency enthusiast since 2020. He loves exploring the crypto ecosystem and is now dedicated to sharing his insights and discoveries through InvestX.
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