This rally over the weekend cost bears over USD 110 Billion in liquidations after a failed breakdown attempt at USD 29K, shorting major support at USD 29K with dismal to accompany the sell-off made for an easy squeeze.
W1 BTC /USD:
Where is it from here? And is this a temporary bottom or a true one? No one knows with 100% certainty; however, today’s had been significant in months from our bulls – and that is a good sign if it weren’t for it still being a weekend in the U.S… How and CBOE greet this high will be very interesting tonight when they reopen for trading.
De Ja Vu, on the 25th of October, 2019, Bitcoin experienced a similar type of event that inevitably led to further price decay months down the track.
On that date, Bitcoin rallied over 40% in a single 24 hour period, then continued its downtrend, potentially baiting in top buyers so bulls can exit positions and bears could smash in a strong short entry.
Moreover, the “trigger” for this event was most likely the supposed “news” that Amazon will be allowing for cryptocurrency purchases on its platform. There is not an actual legitimate source for this information proving it is true. Nonetheless, it sparked the rally we saw today, after months of consolidation within a tight range.
It’s important to note that these types of “news” events are almost certainly false or exaggerated. Almost every major fortune 500 company has begun exploring crypto in some way. However, this does not mean they will support it as a currency on their respective platforms. Thus, it is best to proceed with caution.
Thus, the bulls appear to have staved off a further correction. For now, the real test will be a weekly close above USD 39K . Failure to do that would see a cool-off down to USD 35K as the bulls regather momentum at support… should BTC /USD trade lower. This was indeed an exit pump. In the face of uncertainty, manage your risk… and, above all else, exercise patience.
Bitcoin prints a massive green candle as extreme greed is coming back to the markets. However, not all is as it seems. If the Amazon news turns out to be false or heavily exaggerated, and if we see a repeat of what happened in October 2019, then this could be the final chance to sell at the top. However, if what was said about Amazon is true, this could easily trigger a new paradigm in the market.
See you again for the next update.