Bitcoin has seen more greens in the last day as it climbs its way back above $39,000. As of press time, BTC’s price was rejected at those levels, but the bulls are showing some conviction and could push further into previous highs.
The first crypto by market cap, at the time of writing, is exchanging hands at a price of $38,654 with a 4.2% profit in 24-hours.
BTC with some profits in the 4-hour chart. Source:
In the short term, bulls seem to have the upper hand as market conditions are favorable of a short squeeze. As NewsBTC reported yesterday, the macro-economic factors pushing down Bitcoin will abate for the coming weeks potentially aiding a relief rally into mid-March.
In a recent report, Glassnode identifies a shift in bias from market participants from a majority of long positions during Q4, 2021, to mostly short in January 2022. Despite the recent downtrend, the Open Interest (OI) across the Futures sectors has increased and sits at a nearly two-year high.
Glassnode claims the Futures sector has been seeing a decrease in its trading volume since 2021 standing close to $60 billion a day as Bitcoin reached the low $30,000s. In the meantime, OI records a 1.3% of BTC total market cap which could suggest a deleveraging event is in the making.
In other words, whenever Bitcoin reaches an OI above 1% of its total market cap, BTC’s price is quickly propelled into either direction. As seen below, BTC could either experience a long or short squeeze, but the latter seems more likely due to the shift in traders’ bias. Glassnode :
With high negativity, elevated leverage, and an overall short bias, a reasonable argument could be made for a potential counter-trend short squeeze in the near-term.
Source: Glassnode Insights
Bitcoin Heading To $30K? Volatility Incoming
In high timeframes, Bitcoin’s revisit of previous highs around $40,000 could be short-lived as the market expects the U.S. Federal Reserve (FED) to hike their interest rates by March 17th. Around those times, the crypto market could see more downside back to the low $30,000s or below these levels.
Data from Material Indicators (MI) records a slight change in Options flows with a lot of sold puts for BTC at $25,000 by the end of February. This could suggest BTC would find a solid bottom above these levels, in case of further downside as market participants are getting of their option positions below them. MI :
Last time (July, 2021) we tagged all bearish order flow levels. It’s only 1 observation, but that would put us at 30k daily close before we reverse if it were to happen again. Not sure if we’ll see a repeat.
A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.
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