- Oct 2, 2022
- 1,584
- 2,852
Since the previous accumulation phase finished and we broke though the historical $100k price there seems to have formed a solid support level around $91k. In fact, there have been 4 attempts to drive the price down by the bears and all have failed in the last 6 weeks.
This is how that looks like on the daily chart.
Attempt #1 is normal and almost always price goes down to retest lower levels and look for some support for the new range or leg up.
Attempt #2 was quite interesting. That day, December 5, the price dropped by 15% in literally minutes and it was a move orchestrated by smart money to flush the leverage out of the long positions as the greed had gone so high that the funding rate had reached 0.1 at one point. To give you an idea how crazy this is, the normal funding rate, if you can call it that, in a bull market / a market trending higher is 0.01. Smart money made hundreds of millions that day in literally minutes from the retail traders that got liquidated on the dump down.
What does this funding rate mean though? This is the "cost" the open long futures contracts pay to the short futures contracts. For instance, if a bull has gone long on Binance futures on BTC for $10k and a bear has taken a corresponding opposite BTC short position for $10k then in specific times of the day the bull has to pay the bear 0.01%*10,000 ( funding rate * amount of the position ) or $1, so in total a few dollars per day for as long as those positions remain open. Think of it like what Binance charges you for the privilege of opening a leveraged long position. That day, on December 5, at one point the funding rate ran up to 0.1% which is 10x the normal bull market funding rate which is absolutely bonkers and shows extreme greed.
Attempt #3 was another retest of that $91k support level and this was important because often times the 3rd time is the charm and the price blasts through. BTC held up pretty well again.
And attempt #4 was yesterday where yet again price held up pretty well. This is very significant because US financial news showed very good economy indicators which is generally bad for stocks and crypto because it may indicate Fed won't need to be lowering interest rates for this year and may even raise them by 25bps which is an unfavorable environment for such assets.
It seems that literally all bad news have been thrown at BTC and it has held that level pretty well and from now on, barred some type of black swan like global war or quantum tech rapid advancement, it will be going significantly up.
Let me preface that by saying we may still see some type of deeper correction before that happens.
I personally give this a low probability given the strength it has shown in the last month but here are 3 bearish short-terms moves below that still do not invalidate the bullish momentum higher.
Down to $83250.
Down to $78500.
Down to $72500.
The only way that BTC will start "crashing" is if it loses the $70k. Up to a $70k drop is normal and may even be a bear trap to cause fearful investors sell their BTC for cheaper to smart money.
Keep in mind that Trump has not been inaugurated yet. Just wait and see what happens around the 20th as well as when that administration announces the first direct or indirect pro crypto policy.
This is how that looks like on the daily chart.
Attempt #1 is normal and almost always price goes down to retest lower levels and look for some support for the new range or leg up.
Attempt #2 was quite interesting. That day, December 5, the price dropped by 15% in literally minutes and it was a move orchestrated by smart money to flush the leverage out of the long positions as the greed had gone so high that the funding rate had reached 0.1 at one point. To give you an idea how crazy this is, the normal funding rate, if you can call it that, in a bull market / a market trending higher is 0.01. Smart money made hundreds of millions that day in literally minutes from the retail traders that got liquidated on the dump down.
What does this funding rate mean though? This is the "cost" the open long futures contracts pay to the short futures contracts. For instance, if a bull has gone long on Binance futures on BTC for $10k and a bear has taken a corresponding opposite BTC short position for $10k then in specific times of the day the bull has to pay the bear 0.01%*10,000 ( funding rate * amount of the position ) or $1, so in total a few dollars per day for as long as those positions remain open. Think of it like what Binance charges you for the privilege of opening a leveraged long position. That day, on December 5, at one point the funding rate ran up to 0.1% which is 10x the normal bull market funding rate which is absolutely bonkers and shows extreme greed.
Attempt #3 was another retest of that $91k support level and this was important because often times the 3rd time is the charm and the price blasts through. BTC held up pretty well again.
And attempt #4 was yesterday where yet again price held up pretty well. This is very significant because US financial news showed very good economy indicators which is generally bad for stocks and crypto because it may indicate Fed won't need to be lowering interest rates for this year and may even raise them by 25bps which is an unfavorable environment for such assets.
It seems that literally all bad news have been thrown at BTC and it has held that level pretty well and from now on, barred some type of black swan like global war or quantum tech rapid advancement, it will be going significantly up.
Let me preface that by saying we may still see some type of deeper correction before that happens.
I personally give this a low probability given the strength it has shown in the last month but here are 3 bearish short-terms moves below that still do not invalidate the bullish momentum higher.
Down to $83250.
Down to $78500.
Down to $72500.
The only way that BTC will start "crashing" is if it loses the $70k. Up to a $70k drop is normal and may even be a bear trap to cause fearful investors sell their BTC for cheaper to smart money.
Keep in mind that Trump has not been inaugurated yet. Just wait and see what happens around the 20th as well as when that administration announces the first direct or indirect pro crypto policy.
