If we look at funding rates, we can see the negative print from last week has been quickly reversed. There seems to be very little appetite to short this market.
Given exchange balances continue to decline, I wonder if at any point the sellers will just give up and ride the seemingly inevitable wave to a new ATH.
If we zoom out and take a more 'hodler mindset,' the 3 month moving average of coin flow to and from exchanges paints a clear picture. Save for the hash-crash and Mr. Musk, the net flow of coins has been one-way traffic. Since March 2020, Bitcoin has been hodled off-exchanges. With nearly 80% of all Bitcoin now belonging to long term holders (a level last seen in October 2020), I’m starting to wonder why anyone would want to part with their BTC.
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Intraday price action remains skittish across the crypto world as we wait for tax proposals in the US. A leaked draft suggested a 2.2tn cash grab. Let's not forget the Central Bank's wish to taper bond purchases and hike rates before the inflation genie is out of the bottle. The CV-19 pandemic has made it politically unpalatable for Central Banks to do much right now and so, are sitting on their hands. All of the above creates headwinds in the crypto universe, equities, and gold. Property remains elevated and bonds are near or at all-time lows in yield.
Technically, over the last 24 hours, Bitcoin has held a test of the $44,000 support and a spike to the first resistance at $46,500. For technical purists, it’s been a long wait for the 50-day MA to play catch-up on the 200-day MA. It is almost there and is expected in the coming days, as can be seen on the chart. If this cross occurs, it will be a positive sign for the price of Bitcoin. Bears haven’t given up with repeated attempts to shove the market lower and force logs to capitulate, but will need to take out supports at $44,000, 42,500, and then at the firm demand line/support buy-zone between $40,000 and $41,000. Resistance is seen at $48,175 and $49,755 above current levels: These need to be cleared for any meaningful move higher.
The intraday chart is showing a rectangle formation with repeated attempts to break out on both sides. Bitcoin is respecting the Fibonacci levels and, on this timeframe, is going nowhere. The MACD is positive but with momentum in neutral.
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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.