Bitcoin (BTC) price rebounded more than 8% overnight on March 1, after falling sharply over the weekend.
There are three reasons why the price of Bitcoin has recovered quickly in the past 24 hours. These include the rebounding global stock market, the rising Coinbase premium, and a typical weekend turnaround.
The rising global stock market coincides with the reversal of the weekend
The global stock market began to rebound as soon as the market opened on Monday March 1st.
The stock market collapsed last week due to the rising yield curve for government bonds. As the bond market rebounded, risky assets like stocks declined.
Holger Zschaepitz said global risk markets started the week strong as bond yields fell. He said:
“Global risk markets start the week with a frontline rally in bonds. Australia’s 10-year yield fell 25 basis points, German 10-year fell 3 basis points ahead of inflation data. US 10-year stable at 1.41 %. After last week’s carnage, easing bond yields is a huge relief. Gold rises to $ 1757. #Bitcoin at $ 46.8k. “
Although Bitcoin is viewed as a safe haven and store of value, it often moves in parallel with risk-in-market.
This trend occurs because Bitcoin’s market cap is still around $ 1 trillion. Bitcoin’s valuation is relatively low compared to other safe havens like gold. Therefore, it is more likely to be more influenced by macro factors, at least in the short term.
Santiment analysts said:
“The relationship between the price of #Bitcoin and traditional stocks remains higher than the historical norm. As we’ve noted in previous data studies, $ BTC rallies are usually most pronounced when that correlation goes negative, as in December 2020. “
The simultaneous recovery of the global stock market and cryptocurrencies followed a minor correction in the crypto market over the weekend.
Historically, when the price of Bitcoin drops sharply over the weekend, BTC often sees a relief rally the following week.
This is likely due to the fact that the weekend volume is generally lower. Hence, the trend can change dramatically when a new weekly candle shows up
Coinbase Premium returns
In the past 12 hours, the Coinbase premium rose to around $ 100. Before the reversal, Coinbase was selling at a lower price than Binance, which meant there was strong selling pressure from the US.
As Cointelegraph reported, resetting the futures funding rate signaled that the market was less overheated. This coincided with the return of the Coinbase premium and was a solid signal of improving appetite for Bitcoin, especially in the US.
If the price of Bitcoin trades lower on Coinbase, it is a sign of short-term downward movement as the US dollar pair is naturally trading higher than Tether.
In the foreseeable future, the crypto market has a good chance of recovering this week due to the recovering stock market trend and the consistently high Coinbase premium.
Whalemap’s whale clusters also show that $ 46,000 and $ 56,000 are the top support and resistance levels in the short term.
With Bitcoin rebounding sharply from $ 46,000, there is a high probability that it could soar to $ 56,000 in the next surge.