Bitcoin rose sharply on Tuesday which elevated the price to its highest level since the beginning of March. Some investors hope that the most popular cryptocurrency will break from the tight $5,000 range from $38,000 to $43,000.
- Today's upward impulse managed to squeeze out some short positions across crypto ecosystem, according to Coinglass.
Total 24-hour liquidations stood at $168 million. Source: Coinglass
- On the other hand, analysts from Glassnode, believe that “Bitcoin network utilization and on-chain activity remains firmly within bear market territory, albeit is recovering.” It is evidenced by several on-chain metrics like the number of new entities which has been moving gradually higher since mid-2021. However the pace of growth is slow and steady, similar to previous bearish phases like January 2018. In bullish cycles, new entity growth experiences large spikes similar to July 2020.
Approximately 110,000 new wallets are created on the Bitcoin network per day. Source: Glassnode
- Also recent activity of institutional investors support a bearish outlook. Cryptocurrency investment funds recorded outflows totaling $47million. This is a second week of outflows, predominantly coming from US and Canada caused by the regulation concerns and ongoing war in Ukraine, according to CoinShares.
Bitcoin recorded the highest outflows of 33 million, half the amount seen in the previous week. Source: CoinShares
- Additionally recent comments from central bankers weighed on sentiment. ECB president Lagarde emphasized that cryptocurrencies are being used to circumvent Russia sanctions. Meanwhile FED Williams sees potential in stablecoins, however this asset type must be clearly regulated. However, the central banker is not a fan of other cryptos which in his opinion have fatal flaws.
Bitcoin rose nearly 5.0% during today's session, however buyers struggle to break above major resistance around $43,000. Should break higher occur, upward move may accelerate toward key resistance at $45,000 which is marked with lower limit of the triangle formation and 61.8% Fibonacci retracement of the upward wave launched in July 2021. On the other hand, if sellers manage to regain control, another downward impulse towards support at $38,000 may be launched. Source: xStation5
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