Can Bitcoin stabilize here? I believe there is a high probability of that happening
After reading my report from Thursday, someone decided to buy the dip at $35k. ๐ El Salvador decided to buy 410 Bitcoin at $36.5k, taking their reported holdings to 1500 Bitcoin. Thank you President Bukele! Focus here should be on the emoji above.
Bitcoin hit a low of just over $34k on Friday and over the weekend remained range-bound at around $35k. Even now, it is trading at $35k. RSI tumbled to the lower 20s signaling massively oversold conditions for Bitcoin. It had not seen such levels in the last 1 year.
Trading Volumes rose sharply on Friday and were on the higher side during the weekend. By Sunday, the volume had stabilized to levels seen during the last month. A sharp rise in selling was expected as Equity markets also saw continued sell-off during the last day of the week.
Open Interest dipped a bit but despite such a strong dip, remained relatively stable. This is a good thing in my opinion. Confidence in Bitcoin is still intact in the futures market.
The Funding rate for Bitcoin dipped sharply and went back to levels seen in July when Bitcoin had dipped to $30k. This is already too low and while there is always room to dip further, I think this could be the bottom for funding rates. Nonetheless, shorting Bitcoin is becoming increasingly more expensive and these levels of funding rates should act as a deterrant to short Bitcoin.
What about other risk markets this morning, as Bitcoin is clearly just behaving like any other risk asset. Well, there is some hope here. S&P Futures and Brent Crude are both up this morning. Gold is also up.
While the US Dollar and Bonds are also trading higher, I think some risk-taking is back at the start of this week. As mentioned earlier, S&P 500 is at critical support and that should hold.
Below is where Nasdaq closed on Friday.
Very similar to S&P futures in my opinion and if the action from futures is any sign, then Nasdaq should also find support here as it has dropped below 200 DMA now. Amazon has sold off more than other tech stocks but most of the big names - FB, GOOG, TSLA, MSFT - are at 50 DMA or 200 DMA levels.
I expect risk assets to stabilize this week and trade higher. I do not expect all-time highs soon because of the US Fed's overhang but specifically for Bitcoin, this should be the bottom as well. I will update if anything changes significantly.
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