Interesting that on the first day that a country rolls out BTC as a legal payment method, the market decides to go on a full out-route. Cynical? I've been trading markets for 25 years, and so I can't help it: There is always a reason.
Leverage is to blame for today's move. It was not created by hodlers selling Bitcoin, but instead it was due to heavy selling on derivatives platforms which caused a cascade of auto-liquidations, like a line of dominoes. When this happens, prices swing wildly. Today, the low print of $42,830 was there for a blink of an eye, yet it will stay on the chart forevermore.
Over $2B of long positions were liquidated in under 20 minutes. A sweeping move below $50,000 triggered the avalanche: The good people of El Salvador sat down to lunch and experienced their first taste of what it's like to open a Bitcoin price-tracking app on their phone and blink. Welcome.
Nothing has changed in the last 24 hours except the price. We have all been through this before, and should we see a heightened level of FUD in the coming days, we can put this one down to 'interference.' Hodlers gonn' hodl, you would have thought that the powers that be understood this by now.
Bitcoin is inevitable, and is down less than 1% over the last 7 days.
Resistance at $53,165 held today, and the retracement back to support at $50,265 failed to hold as the market broke the key level and found stop-loss orders. A quick move down, which extended losses below $43,000, found buying support, with prices rotating quickly back to $47,500.
Tonight, the close is critical: Above $47,500 and the market will slowly walk its way back up to $50,000. Below $47,500 and we face a day or two of uncertainty. $44,000 will be the first level the bears look to attack, and they will be keen to pressure those remaining weak longs into fear mode.
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BTC rose another 3% yesterday, currently at $44,600 and tantalizingly close to the 45K resistance/support.
Bitcoin has enjoyed a positive trading session today, with prices up 7% post this morning's news that China had taken some small steps to avoid an immediate default from Evergrande. The addition of liquidity to the banking system may just be a shock absorber for next week's action, or it could be the first shot in a sustained program to assist with Evegrande's woes.