Bitcoin Jumps Up To $8,000
And just like that, we’re back over $8,000. Just hours ago, Bitcoin (BTC) tapped the aforementioned price level yet again, seemingly denying calls that a downturn is inbound. As Dan Held, the co-founder of Interchange, the “market bounced quickly from that fierce dip.” This move comes after CNBC “Fast Money’s” social media managers made a seemingly bearish ‘analysis’ of the crypto market. The jokes on them.
For those who don’t know what Held, a long-time Bitcoiner is talking about, here’s a brief update.
On Friday, Bitcoin slipped from $7,800 to $6,100 on Bitstamp. Evidence is mounting that a single actor, or group of entities, catalyzed this move with mere clicks of their mouses. As recently noted by Adamant Capital’s Tuur Demeester, the rapid collapse was led by serious sell orders on Bitstamp. Some have suggested that this was in a bid to manipulate the value of the BitMEX’s perpetual swap for Bitcoin, specifically in an attempt to liquidate the millions of dollars of shorts racking up over recent days and weeks.
As Three Arrows Capital’s Su Zhu suggests, someone tried to exploit BitMEX’s mark price by placing a large sell order on Bitstamp, which the former exchange draws data from to determine its index. Order book history seemingly corroborates this theory, as an entity placed a massive 2,000 BTC sell order at $6,500 on Bitstamp, seemingly in a bid to depress the price for a short period of time.
Following this move, many analysts flipped bearish. As reported by Ethereum World News previously, Magic explained that strong, correlated increases in the Money Flow Index (MFI) and Network Value to Transaction ratio (NVT), two trend and momentum indicators, on the weekly chart have always preceded drops in the BTC price. In 2011, when the two indicators reached the peak of their range (like we see now), a 93% correction ensued. In 2013, the two indicators hit overbought/overvalued ranges twice, which were followed by a 75% and 85% decline, respectively.
The analyst, who predicted late-2018’s collapse, goes on to say that Bitcoin’s current rally makes no logical sense, pinning the irrationality of this market to institutional investors, futures, trading desks, high-frequency trading, and other factors that have been known to manipulate the underlying nature of markets. Specifically, he looks to the fact that Bitcoin has yet to touch its logarithmic regression line, which the asset has historically traded parallel to before a bull rally.
Others were also bearish. Bravado’s Jack remarked that the fact that BTC fell under a key short-term support level, which he dubbed a “swing low”, with Friday’s plunge was not the best sign.
Everyone Flips Bullish
With this move, however, many have quickly flipped bullish. The fact is, no one expected a return so quick, making this resurgence that much more bullish for the leading cryptocurrency.
Trader CryptoGainz noted that the “bearish dream setup” got “shat on”, adding that shorts on BitMEX were absolutely decimated with this recent move.
More analytically and level-headily, Level’s Josh Rager notes that this recent spike brings BTC closer to $8,216, which is a key short-term. If BTC closes its weekly candle above that level, Rager thinks a move to $9,500 could be in the cards.
Title Image Courtesy of Icons8 Team Via Unsplash
