Before the market opened today, I was thinking whether this surge in Bitcoin was a transformation of its nature and style or just a manipulation.. With the opening of the U.S. stock market, the S&P and Nasdaq dropped by 3%.. Bitcoin instead continued to stay above 88K.. So we can continue to think about what macro factors are behind this, as follows..
The U.S. dollar index (DXY) has fallen to a three-year low, with capital leaving dollar assets and entering gold and Bitcoin.
This is currently the most widely accepted key factor for BTC's rise today. The dollar is weakening, so today gold has reached above 3400 and set a new high. Additionally, reports over the weekend indicated that funds are flowing out of U.S. stocks and bonds at an unprecedented rate.. As funds flow out, there will be a pursuit of safe-haven assets.. Gold has already reached a historical high, and instead of buying the 3400 gold, it’s better to buy Bitcoin starting with 8.. Therefore, some institutions believe BTC has become a hedging tool against the dollar today.
Additionally, last week, old Trump was continuously making statements wanting to fire Powell to intervene in the Federal Reserve.. This effectively weakened the scrutiny over the dollar, causing funds to flow out of the dollar and into other markets, and aside from the peak gold, BTC suddenly became a sought-after safe haven... This is roughly the logic behind it..
I also saw another claim that after capital flows out of the dollar market, BTC is used as an exchange channel to exit the U.S. market.. Hence, it started to surge.. For reference only..
However, judging the nature of BTC from a one-day trend may still be too early.. We should think about the Friday before the black Monday in April, when the U.S. stock market plummeted but BTC did not.. However, by Monday it was still at 74K.. So let's continue to observe for a while..
2 Squeeze market
This morning in the liquidity analysis, it was mentioned that there is a squeeze of 170 million short positions above 87K.. After a short squeeze, the stop-loss liquidation of shorts provides fuel for the rise..
3 Major players accelerating accumulation
Recently, on-chain data has already shown that whales have begun to enter the market in large amounts between 80K-84K.. Today's announcements from MicroStrategy and Metaplanet to increase positions further stimulated the market..
After talking about the macro view, let's continue discussing the technical aspects of the operation.. It's quite contradictory.
From the K-line perspective, although it has entered the early trapped area of 88K-89K.. After breaking 87700 and retesting without breaking it, it does not count as injecting liquidity.. The subsequent trend depends on whether it first fills the gap at 88400 or at 87800..
From the perspective of liquidation liquidity, the high leverage of shorts from basically three days ago has been liquidated.. The 30-day short liquidation liquidity still has the largest target near 89K.. (Figure 1)
From the order flow perspective, there are still two orders of over 100 coins at 88500 and 90000 on the spot market (Figure 2)
From the order book data, currently the sell orders exceed the buy orders.. The amount of funds needed for the market to go down is less than that needed to continue going up.
From the position situation, currently only 39% of the accounts holding BTC long positions in the exchange, retail investors are extremely bearish.. (Figure 3)
Both bulls and bears still have their reasons..
The reason for the short long position is that it hasn't broken 87700, and under the influence of the funds flowing out of dollars, it continues to consume liquidity at 89000..
The reason for the short position is that short-term liquidity has been exhausted, and both order book data and position data are leaning bearish..
I personally still hold my previous short position at 87700, with a stop loss at 88500..