Crypto Market

Morning (Irish time) SAC fam.

On the wider crypto market, we have seen a significant reduction in the price of Bitcoin amongst other cryptos over the past 2 weeks. This comes off the back of a number of events. We’ve had the FED tapering quantitative easing measures, causing the US treasury yield to rise. This causes a scare in equity and crypto markets as we have seen.

We can also look to on-chain and derivatives data for information. Bitcoin perpetual open interest has spiked in recent weeks. Open interest is essentially the amount of short/long contracts were open in the market. A build up of open interest causes a lot of pressure in the market, which brings periods of significant volatility. It was unclear which way the market was going to go, but in this case it broke downwards.

We’re now around the $40k range, which I think is a good buying opportunity. I have started to buy myself. There is a lot of support at this range and we are seeing funding go negative (short traders pay longs to take the other side of the position). Usually when funding goes negative, it means long leverage has been flushed out and price will begin to grind upwards. This is similar to when we saw a short squeeze and subsequent price rally in mid July. If we break below $40k, I see the the next buying opportunity at $30k. Other than that, if we flip $53k I am also bullish.

If you’ve any questions, please reach out to me on discord. My name is CryptoCorner_NFT, and I am very active in the crypto chat.