Bitcoin penned what is known as a ‘bullish engulfing’ pattern on Wednesday’s chart, with a green candlestick eclipsing Tuesday’s red candlestick.
In other words, the world’s largest cryptocurrency recovered all of Tuesday’s losses against the US dollar by surging more than 9.5% by the end of the day.
This pattern is commonly interpreted by technical analysts as a potential reversal from a bearish to a bullish market sentiment.
Image credit – Binance
Bitcoin saw a bout of selling pressure over the past seven days after achieving an all-time high last Thursday, but this bullish engulfing may suggest that the market remains resilient, if volatile.
Yesterday’s bullish recovery was aided by record highs in the equities markets after the US Federal Reserve raised the prospect of three rate cuts occurring in 2024.
Trades have been weaker this morning though, with the BTC/USD pair dipping 0.8%
Exchange-traded fund flows – which have been behind bitcoin’s remarkable performance in 2024 – have begun to bleed cash.
Farside Investors’ bitcoin ETF tracker shows more than $700 million in cash outflows in the past three days, largely driven by large-scale redemptions for the Grayscale Bitcoin Trust (GBTC).
At the time of writing, bitcoin was swapping for $67,200, which is around 59% higher year to date.
Week on week, bitcoin is down 7.4%, while Ethereum (ETH)’s losses have entered the low double digits.
In the wider altcoin space, Solana (SOL) has filled Binance’s BNB token as the third-largest cryptocurrency (excluding the Tether stablecoin), having gained 11% week on week.
Cardano (ADA), Dogecoin (DOGE) and Shiba Inu (SHIB) have all dipped close to 20% over the past seven days.
Global cryptocurrency market capitalisation currently stands at $2.55 trillion, with bitcoin dominance at 53.7%.