For the past 48 hours we have seen fundamental news move the market both directions with high rates.
A U.S. government account has liquidated a significant size of its portfolio. More on that later.
Positions on Bitcoin got wiped massively and now the levels of open trades has fallen to March levels. What does that mean? Let’s see what the charts have to say.
FUNDAMENTAL
During the last two days ~20% of Open Interest has been wiped with a total of well over $70B in value. This means that the market is open to volatility and we can possibly see rapid movements to either side.
The sharp move to both up and down on Wednesday was mostly caused by a wallet that is owned by the U.S. Government making transactions. Short sellers were liquidated on the move up and euphoric buyers got trapped on the move down. That is why it is best to trade on levels and not emotional sentiment.
What is Open Interest?
Open interest is defined as the amount of open positions (including both long and short positions) currently on a derivative exchange’s BTC/USD trading pairs.
BITCOIN
On Tuesday we saw a pump that supported the parallel channel’s pattern. It was crucial for BTC to bounce from the initial level to keep the bullish momentum.
Not until Wednesday we saw a significant and a quite unusual move for BTC. The price reaches the middle line of the channel and eventually came back. Over 5% of the BTC price gain was lost today to end up on the negative.
A major resistance for BTC is $28 400 – $28 600 and if we close below it the plan will not change – momentum not enough to sustain uptrend. A lower high will also be recorded if BTC closes on the red today. This sets the next majors support for BTC at $26 700 – $26 300.
In order for reversal to be in play we have to see the price support $28 400. Then the next target will have to be the last high – $30 400 to $31 000. As of now the odds are still in favour of a further drop. If the latest high is reached it will be highly unlikely for bulls to push the price over $31 600, as the major sell zone on BTC is still in play with not yet swept orders.
These choppy moves are not beneficial for the healthy outcome of the market, as they bring euphoria and panic, which essentially makes traders take emotional decisions.
LINK FOR THE BITCOIN CHART HERE!
SOLANA
SOL recorded a mere 10% gain since the BTC short rally and the price has been dragged down to over 3% loss for the day.
The price is currently positioned below the Short-Term Support Area and currently the selling pressure has not allowed long buyers to push the price above it. That means that if we close the daily candle in these levels, the area will become resistance.
The range between $20.43 – $19.35 still remains highly desired for accumulation on the currency. SOL found resistance on the pump and the ex-support exhausted the bulls and they lost the momentum. The drop after the spike up caused the price to bounce from the area.
In order to flip the narrative on SOL to bullish, we have to see the price support above the $21.70 area. The clean ranges help indicate the desired levels to take profit from.
Overall, looking to see how the market will play out until the end of Wednesday, so the volatility can be reduced.
