Stagnation is not a word one would think of using at this point in time, with regard to Bitcoin or cryptocurrencies. Since Monday, BTC has rallied about 20%.
Since yesterday and since prices reached new highs though, BTC hasn't moved much. We're staying a tad above or below 23,000. This in itself is amazing and shows a very strong market.
It also means that investors have arrived at a point where uncertainty prevails. Are we courageous enough to hope for more upside? Not just yet. Are we willing to sell such an asset right now? Probably not yet either.
The interest and optimism for BTC has bolstered volumes but also increased the open interest on derivatives (CME BTC Futures hitting all-time high, as per the below). The same picture appears on most exchanges and it says something about the amount of leveraged positions out there. Those positions can propel prices much higher but could also get hit the other way, triggering painful liquidations.
The next stage after a pause (a breather for both buyers and sellers) is typically another bout of volatility. It'll be fascinating to see which way we go, whether we explore the chart higher or revisit prior levels.
For now, the US dollar continues to trickle down further and until a significant bounce occurs, it's probable that traders will favor risk assets (of all sorts). Instead of saying he was going long BTC, I once heard a trader saying he was shorting fiat. How are you positioning yourself?
Bitcoin has begun to consolidate in the mid $23,000's. Yesterday saw a high print of $23,776, which has now become our key resistance level. We attempted to break up through it later in the session, but sellers arrived to dampen the momentum.
Today Bitcoin needs to climb back above $23,245 for another attempt at the new all-time high. Failure to do so will see us retrace to support at $22,260, which along with $21,730 will provide a protective base for the next leg of the rally to build from.
A break below $21,730 will take us back down to $20,820 and change the momentum of the market. As we head into the weekend trading session, its best to expect volatility to continue.
It looks like crypto isn’t correlated to traditional markets, at least not during this past session.
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