Today is what you might call a bad news day. Bitcoin's march higher has been brought to an abrupt end, with prices down 16%. This time last week, Bitcoin was trading $28,000. It's amazing how short-term memories are clouded by a decreasing profit and loss statement! Bitcoin's failure to push higher over the weekend has seen profit taking cascade into auto-liquidations of leveraged longs to the tune of $2.7B.
For those of us who have held Bitcoin longer than the time it takes to mine a block, this is just another Bitcoin retracement. For the new crowd, this is their first taste of the infamous 'Bitcoin volatility.'
This sell-off will likely slow the next wave of any rally. If you were thinking of taking some profit off the table at $40,000 over the weekend, it's likely the next time round, you will.
As much fun as last week's rally was, a period of consolidation and sideways trading provides a solid base upon which to build the next leg higher. In the mean-time, we can expect some more of that infamous volatility as weak hands exit positions.
I'll leave you with the below picture.
The Bitcoin sold today is heading in one direction. Wallet's containing 1,000 or more Bitcoins are soaking up the newly available supply.
As the saying goes: "Sell to the sound of trumpets, buy to the sound of cannons... "
Having failed to print new highs during this weekend's trading session, Bitcoin experienced some downside volatility. Sunday's price drop was quickly recovered, with the market closing above $38,000. However, the break back below the key $38,180 level this morning led to further selling pressure, driven by auto-liquidations.
Prices retreated down to our key support level of $32,300, before regaining composure. A further break down has seen us target $29,980. Should this level fail to hold, then $28,000 is likely to halt any further downside.
On the upside, a move back above $35,868 will see us trend towards $38,180, which is now our key resistance level. For the bulls to take back the baton, they will need the market to consolidate above $38,000 in order to set up the next push to $40,000 and beyond.
It looks like crypto isn’t correlated to traditional markets, at least not during this past session.
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