Bitcoin Price Fails For The Third Time As Well; BTC Back to Ranging?
This week has turned out to be a repeat of the last two ones of this month as bitcoin makes a hattrick of breaking above $12,000 only to crash afterward.
Just like the first two Mondays, the leading digital asset went above $12k but couldn’t sustain this level. Today, we went even lower to almost $11,600.
For now, trader Josh Rager is expecting “some ranging.” He said,
“4 hr closing above weekly open and good to hold the $11,900 level. Closing below and re-acceptance in previous range wouldn't be ideal. Daily close back above $12,300 would be higher-high and likely lead to continuation to the upside,”
At the time of writing, BTC/USD has been trading above $11,800, down 6.8% from the Monday high with $3.3 billion recorded in ‘real’ volume.
This has resulted in even deeper losses for altcoins, which are down 5% to 9% in the past 24 hours.
The losses came despite the market showing strength and both bitcoin and ether printing new yearly highs this week. However, these gains have pushed the market sentiments to “extreme greed” for over two weeks now.
Moreover, the overall open interest in the bitcoin market is at an all-time high at $5.8 billion, with the CME accounting for close to $1 billion. Arcane Research stated,
“There has never been more money in the bitcoin futures market!”
The premium rates in the futures market are also growing rapidly, back to the levels seen in February this year. The September contracts on the institutional-focused platform are now trading at an annualized premium of 21% while the retail platforms have an average annualized premium of 18%.
The focus is on the upside exposure with the price of Bitcoin futures on CME still being slightly, about $30, higher than the spot price.
Much like BTC price, the hash rate of the network has taken a dip due to heavy rainstorms in China that have affected the major mining pools in the Sichuan region, which accounts for about 50% of bitcoin’s computing power.
Similar to the digital asset, Gold slipped back below $2,000 to $1,979 an ounce today.
Unlike Bitcoin and precious metal losses, the S&P 500 went higher to hit its highest level ever, wiping out all the losses from the coronavirus sell-off.
It has been a massive stimulus and a surge in technology companies that propelled his rebound in American equities, which could be the beginning of a new bull market. Katie Nixon, chief investment officer at Northern Trust Wealth Management said,
“We have a Federal Reserve that is all in, keeping rates low probably across the curve for as far as the eye can see.”
“That is supportive of higher valuations.”
The Nasdaq Composite also made a new record on Tuesday, helped by the gains in Amazon and Netflix. Dow Jones, meanwhile, is still 6% down from its ATH.
Bitcoin is also still down 40% from its all-time high made in December 2017 after recording 60% gains YTD and having recovered 210% since March lows.