By Marco Oehrl
Investing.com - Bitcoin posted further gains yesterday, reaching a high of $32,400 yesterday afternoon. Today, Wednesday, it remained in positive territory despite a correction that took the cryptocurrency just below the $32,000 mark.
It is striking that yesterday's Bitcoin gains occurred at a time when the stock markets were declining. This confirms that the correlation between BTC and equities is increasingly being questioned. Most European stock markets ended the day lower by more than 1%, and US indices were also in the red, although to a lesser extent.
This decline in risk appetite casts doubt on whether bitcoin will really be able to extend its recent upward movement.
Bitcoin is still in a bubble
Deutsche Bank published a survey on Tuesday. It showed that the majority of investors are still convinced that bitcoin is in the realm of an "extreme bubble".
The opinion of the investors surveyed was similar for the Nasdaq. Although the Nasdaq 100 Index has fallen by more than 20 % since the beginning of the year, technology stocks are still seen as a bubble.
The market analyst behind the Twitter account Pentoshi, warns that it is too early to assume a new rally. In his view, it is merely a bear market rally:
"Bear market rallies can be brutal. They can go much higher than you think, but almost always end with a lower high.
New all-time highs should only be expected when the market provides validation."
Bitcoin technical price levels
Bitcoin continues to struggle with the 23.6 percent Fibo retracement of $31,621. Yesterday, it did form a high at $32,377, but the daily candle closed almost at its initial level. The Doji candle thus formed signals that market participants are undecided about which of the two directions to take going forward.
A sustainable daily close above the 23.6 percent Fibo level would be essential for the rally to extend towards the 38.2 percent Fibo retracement of $34,789.
Should this not be successful, an extension of the sideways movement and a test of the psychological mark of $30,000 must be expected.