I am still in bed, so a proper update will have to wait... But I know for some traders today is scary so I wanted to post a quick update.
First you should strap in- if $60k support levels don't hold, we will watch a range of support from $53k up to $60k. I don't want to see us close below $52k, that risks the start of a longer term bearish trend.
I think a confluence of factors are driving this correction and these are all very normal market actions. Nothing to panic over:
1. The market was struggling to make new highs, this correction lets MM/whales grab liquidity to fuel another rally to the upside later
2. DXY pumping (remember my post about DXY above?). The USD Index has an inverse correlation to Bitcoin. If DXY goes up on macro trend, Bitcoin generally goes down.
3. Leverage traders need shaken out of their positions because too much leverage is unhealthy for crypto markets. They amplify the impact of corrections in the market, sometimes to an unhealthy degree. Open interest/leverage ratio is still too high. I always say when the market gets easy to trade, its a trap.
We still see signs of whales accumulating, and no massive inflows appearing from smart money like miners. I expect this is a short term correction but still trade safely, have a plan and stoploss set.
First you should strap in- if $60k support levels don't hold, we will watch a range of support from $53k up to $60k. I don't want to see us close below $52k, that risks the start of a longer term bearish trend.
I think a confluence of factors are driving this correction and these are all very normal market actions. Nothing to panic over:
1. The market was struggling to make new highs, this correction lets MM/whales grab liquidity to fuel another rally to the upside later
2. DXY pumping (remember my post about DXY above?). The USD Index has an inverse correlation to Bitcoin. If DXY goes up on macro trend, Bitcoin generally goes down.
3. Leverage traders need shaken out of their positions because too much leverage is unhealthy for crypto markets. They amplify the impact of corrections in the market, sometimes to an unhealthy degree. Open interest/leverage ratio is still too high. I always say when the market gets easy to trade, its a trap.
We still see signs of whales accumulating, and no massive inflows appearing from smart money like miners. I expect this is a short term correction but still trade safely, have a plan and stoploss set.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.