Bitcoin Seeing New ‘Macro Bullish’ HODLers, But Traders Call Out Short Term Sell-Off Before New High
Yesterday, we managed to get back above $10,800 before President Donald Trump sent the BTC price tumbling by announcing that he broke off the additional coronavirus relief fund negotiations with the Democrat.
Unsurprisingly, Bitcoin’s drop of 2% was in tandem with the equity market, which fell nearly 1.8%. But interestingly, it was gold that got hit the hardest, about 2.6%.
Markets are still wobbly, despite Trump backtracking, with altcoins continuing to drown in losses.
With notable losers including CREAM (24%), SWRV (20%), YFI (14%), SUSHI (13%), CRV (12%), and Aave (10%) DeFi tokens continue to bleed the most.
While the leading digital asset's price remains subdued, bitcoin realized volatility has hit a three-year low at 20%.
As we reported, this could result in a bout of volatility. Although network activity calls for bulls, bears can’t be called off altogether as the last time bitcoin realized volatility hit the lowest was right before the crash of November 2018 started.
“Bitcoin 30-day historic volatility has been falling fast and is in the '20s. In the past, it has hit 20% vol 7 times. 6 times prices exploded higher immediately, and vol hit 80% in a few months. 1 time (Nov 2018) prices fell sharply. Either way, a big move is coming soon,” noted Raoul Pal of Real Vision Group.
Before BTC could jump higher in the near term, many are waiting for the price to take a dip first.
“I remain bearish for the time being. 10k support was tested, but lack of strength is apparent, price action is weak, no volume. breaking last low of $9,882 would likely trigger massive selling across the board. bearish until convinced otherwise by bull strength,” said Trader Crypto Yoda.
And while trader Loomdart is also looking for a downwards move, he doesn’t see BTC breaking the important $10,000 level before hitting the 2019 high of $14,000.
1/ I think $BTC finishes the year *much* higher than it is now.
But I also think we see a sweep of the low's first. Maybe lower. Soon.
If you can't accept uncertainty & complexity, then you shouldn't be active in markets.
— Cole Garner (@ColeGarnerBTC) October 7, 2020
Amidst this, the coins on the spot exchanges are dropping, which is even more exaggerated with global exchanges.
According to on-chain analyst Willy Woo, this is “very macro bullish,” because “it's a sign that new buyers are coming in to scoop coins off the markets and moving them into cold storage HODL, we are seeing new HODLers right now.”
The analyst also points out how the 2017 bull market was fueled by the first scoop up of the coin at that time, which coincided with Wall Street Journal covering Bitcoin as a legitimate investment vehicle off the back of the Winklevoss ETF news. This time, the latest coins moving off the exchanges coincides with MicroStrategy buying Bitcoin.