Choppy Market but not for long - BTC Analysis
Gm fam,
Hope y’all having a great Sunday!
In this brief newsletter we will sum up what’s going on with BTC and the crypto markets.
All and all, we have been chopping around the whole week, choppy markets favour spot buys and less derivatives, odds of getting stopped out is higher, so as I’ve said in the trading floor, I’d not overleverage until we are out of this range.. that being said, let’s analyse the chart below:
$63.000 - $62.000 is key support level where also we have the golden pocket and 0.786 fib level. Until bulls manage to keep the price above those levels I’d not worry too much.
When we were trading at around $62.000, we had the possibility of BTC going for a sweep of the lows at around $59.000 with a possible wick towards the $56.000 region to wipe out overleveraged longs. I’ve to say, that until the green area holds (62-63k btc) this scenarios has now way lower chances of unfolding.
WHY?
Mainly the funding rates and OI (Open Interest) have completely resetted.
This is a screenshot when the market was overleveraged:
This is a screenshot after the correction:
Funding, as said, completely resetted. Meaning that this is an healthy and well needed pullback that suggest a continuation to the upside.
Also, is important to notice how open interest also is at its lows, meaning that the majority of this selling pressure have been absorbed by spot buyers and less derivatives.
Huge tip: When OI is super high, usually you have those big wicks on the chart to wipe out overleveraged traders. That’s also another reason why I’m not expecting any big flush at the moment.
BTC has likely bottomed here, hence why I brought up over and over on all my socials the fact that this was a perfect buy the dip opportunity/and a perfect time to start scaling into positions (DCA).
Also it’s important to notice the importance of the $65.500 level. WHY?
Key level on the daily timeframe (where the 21D EMA sits)
And potential break + retest on HTF (yellow line below)
Ideally I want to see BTC closing the weekly candle today above that level! (we are not out of danger yet)
Well, that’s it fam, that was a quick update for yall, I hope you liked it!
Have a great rest of the weekend!
Until next time,
Omega