A brief move lower in the Asian trading session was quickly countered, and Bitcoin now sits less than 1% down on the day. It's starting to feel like we've seen this movie before. Evergrande is likely to have defaulted come the end of the week, and although it's only Tuesday, I can already see one of those weekend trading sessions that keep us glued to our screens.
Now, I'm all for a bit of Bitcoin PR, as you've probably figured out from reading my report for the last 18 months, but it does concern me a little when the best 'we' can muster is a report stating crypto inflows have risen for the 5th week in a row.
And for that report to be accompanied by the above graphic - not exactly the kind of confidence boosting picture we are after this week.
Let us hope this little uptick in exchange balances is just a blip and doesn't become a 'thing.' Thankfully, exchange inflows to spot and derivative exchanges are equally balanced, which although is not great, it is better than just a spike of inflows to spot exchanges, followed by the market having to absorb additional selling pressure.
Evergrande will likely dominate the news for a few more days, and then, we can move onto the US debt ceiling and settle in for some politics. The world's largest holder of US treasuries? China - which appears very ready to make an example of Evergrande. The timing is interesting and with the world's markets facing a potential period of risk-off, it would appear that a quick resolution to the US debt ceiling could become essential.
Or all hell could break loose.
It has been a wild ride in Bitcoin as the market saw capitulation from leveraged players, and long-term hodlers dug in, as they have seen this all before. For the bulls, a bullish Japanese candlestick pinbar formed off the bottom today: It will be interesting to see if this plays out and a push towards $47,000 can be made. For the bears, a lower high may be in place now on the recent rally to just above $48,000, causing a “sell rallies” mentality in the short-term. Global markets all seem jittery on the back of China’s Evergrande, and it’s not over until it’s over. Will the PBOC come to the rescue and soothe markets?
Panic-selling in Bitcoin on a break of $44,000 saw a swift move to the $40,000 major support, as leveraged longs were flushed out. The $40,000 price level held and Bitcoin bounced hard. Similar price action was seen in ETH. Bitcoin is now sitting just above the $42,600 support, with resistance at $44,150, $45,235, and $46,720.
Testing the lower side of the range on the weekly chart, Bitcoin needs to close below $40,000 before we reassess the July/Aug bull run. Oscillators are not giving much, with positive momentum in the MACD and neutral momentum on the RSI.
Subscribe here to the full report.
It looks like crypto isn’t correlated to traditional markets, at least not during this past session.
Bringing digital assets to the world.
EQONEX is a digital assets financial services company focused on delivering a full, digital asset ecosystem that offers innovative, trusted, and transparent products and services.
© 2022 EQONEX Capital Pte Ltd
All rights reserved.