Alright so, that correction was fast but IMO it was necessary for bitcoin to continue further in this second leg of the cycle. I was short and made some good profit but now am in some long positions.. not perfect entries but that's ok and here's why:
1. Lots of people are taking this correction as a break of bull structure in the recent month or so, however I would argue that if you look beyond the past 2 weeks, we have yet to put in a lower low and have respected an upward trendline with a third touch! (if you draw from the wicks)
2. Earlier this year, Bitcoin swing failed the 60K resistance 3 different times. Historically with bitcoin, the stronger the resistance is.. the stronger the support it provides once flipped. I think the likely-hood that this 58K-60K supply zone holds is more likely that a break down. This is also supported by the amount of volume we have here! (refer to chart)
3. We are seeing a lot of spot buying happening for bitcoin and Ethereum right now. While short positions are continuing to rise at the lows of this move down.. I think the spot buying combined with the increase of late shorts opening here will result in a short squeeze as the leveraged market recovers.
4. FUD: Buy the rumor sell the news: We knew the taproot upgrade was coming.. that was a great buy the rumor sell the news scenario, very common in crypto. The taproot upgrade launch day combined with the biden infrastructure bill FUD and the DXY rally was really the perfect storm for this dump. Now retail traders who got absolutely wrecked and trade with momentum are mega bear while smart money is buying.
1. Lots of people are taking this correction as a break of bull structure in the recent month or so, however I would argue that if you look beyond the past 2 weeks, we have yet to put in a lower low and have respected an upward trendline with a third touch! (if you draw from the wicks)
2. Earlier this year, Bitcoin swing failed the 60K resistance 3 different times. Historically with bitcoin, the stronger the resistance is.. the stronger the support it provides once flipped. I think the likely-hood that this 58K-60K supply zone holds is more likely that a break down. This is also supported by the amount of volume we have here! (refer to chart)
3. We are seeing a lot of spot buying happening for bitcoin and Ethereum right now. While short positions are continuing to rise at the lows of this move down.. I think the spot buying combined with the increase of late shorts opening here will result in a short squeeze as the leveraged market recovers.
4. FUD: Buy the rumor sell the news: We knew the taproot upgrade was coming.. that was a great buy the rumor sell the news scenario, very common in crypto. The taproot upgrade launch day combined with the biden infrastructure bill FUD and the DXY rally was really the perfect storm for this dump. Now retail traders who got absolutely wrecked and trade with momentum are mega bear while smart money is buying.