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Bitcoin price and other cryptocurrencies rallied, reversing losses from a few days ago

Bitcoin price and other cryptocurrencies recovered on Friday, reversing losses from a few days ago. Altcoins outperformed as Ether (ETH), the world’s second-largest cryptocurrency, has gained 13% in the past 24 hours compared to BTC’s 11% gain. At the time of writing, BTC is changing hands at $41,764.

bitcoin-price-and-other-cryptocurrencies-rallied-reversing-losses-from-a-few-days-ago

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price rallies as altcoins take the lead.

Bitcoin buyers were active over the past 24 hours as the cryptocurrency topped $40,000 for the first time in two weeks. Upside momentum is improving after technical indicators reached the most oversold levels since March 2020.

“Bitcoin has leaped back to the $40k’s on Friday in tandem with equities markets surging. With this upswing, traders’ positive vs. negative commentary has blasted off to its highest ratio since late October, as BTC maximalists are chiming in”, Santiment stated.

bitcoin-price-and-other-cryptocurrencies-rallied-reversing-losses-from-a-few-days-ago

Source: Santiment

Buyers will need to make a decisive move above $40,000 to reverse the price downtrend since the November peak of around $69,000. Over the past few months, brief rallies have been capped below resistance levels, which means sellers have been in control.

Over the short term, however, bitcoin could see the additional upside, especially since the Relative Strength Index (RSI) is not overbought on the daily chart. The next resistance level is around $45,000, which could stall the current rally.

Bitcoin’s price will need to remain above $37,000 over the weekend to signal the start of a recovery phase. Still, significant price gains are unlikely if negative momentum signals are confirmed on the monthly chart.

Technical confirmation requires at least two consecutive days or weekly price closes above or below a significant support/resistance level. When gains or losses are carried over into the following trading session, it may reflect conviction among buyers and sellers, leading to more reliable price targets.

The discussion rate of the word pump on crypto social circles has hit a 3-week high, as Bitcoin has made another end-of-week rally to rebound to $41.6k. Watch carefully for crowd doubt to imply whether the rally can punish those spreading FUD.

bitcoin-price-and-other-cryptocurrencies-rallied-reversing-losses-from-a-few-days-ago

Source: Santiment

Technical indicators point to additional price gains for bitcoin if buyers maintain support above $37,000 over the weekend. Further, a decisive move above $40,000 could signal the start of a recovery phase.

Over the past few weeks, several indicators such as the bitcoin Fear & Greed Index, Relative Strength Index (RSI), and a six-month high in the bitcoin options put/call ratio signaled bearish extremes in the crypto market. Some analysts expect crypto buyers to return, similar to the July 2020 price bottom at $28,000 BTC.

Metaverse-related tokens took a hit in the past two days as Meta, formerly known as Facebook, reported a $10 billion loss on its augmented and virtual reality division in an earnings release earlier this week. That setback will directly impact the market perception of other metaverses, a developer said. Tokens of blockchain-based games Axie Infinity (AXS), The Sandbox (SAND), and Gala (GALA) fell as much as 12% in the past 24 hours. However, losses were quickly retracted as the crypto market rallied later in the North American trading day.

Next week, the Federal Reserve Governer and Cleveland’s Fed President speak. Any monetary policy discussed could impact the markets. The overall cryptocurrency market cap stands at $1.884 trillion, and Bitcoin Dominance is 41.8%.

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