According to CoinMarketCap, platform capitalization of Bitcoin has increased by $100 billion in just one night only. The capitalization increase was followed by 12.5 percent growth at the highest point of the day.
Rapid price increase and capitalization growth may have occurred for various reasons, but the most popular assumption is the short squeeze that happened due to the high amount of shorts that bears have opened after a recent $32,000 price drop.
Do the capitalization spike and 12.5 percent price increase mean that the Bitcoin downtrend is over?
If we look closely at the daily Bitcoin chart provided by TradingView, we can clearly see that the price right now is consolidating at the value of $38,700, which matches the strong resistance point—the 200-day moving average (black line on the graph) that is usually used as an ultimate trend indicator.
If the price stays above that moving average, it means that it is moving in an uptrend. If the price of the asset goes below that line, traders are usually closing their long positions due to the high possibility of downtrend movement.
Right now, market participants are “thinking” about which way to move Bitcoin. If the price goes above the mentioned line and stays there for a while, Bitcoin’s downtrend movement that began in May will be considered over.
Additional market stats
Other cryptocurrencies like Ethereum, Cardano and BNB are also moving up with an average price increase of nine percent.
The rapid price increase of Bitcoin has not led to an unexpected dominance increase as usual. At press time, Bitcoin market dominance has been staying around values of 47 percent. But we cannot say the same about the Bitcoin trading volume, which has increased by 76 percent with $35 million in the past 24 hours. The average volume before the recent price increase stayed around $20 million per day.