Bitcoin’s $10,000 Run-Up This Time Means “More Room for FOMO & Less for a Massive Dump”
Last night, bitcoin broke above the most coveted level $10,000 — “key technical break,” before falling. Currently, we are trading under $10k while “real” volume remains strong at $3.4 billion.
The last time we were at the $10,000 level was in February. At that time, the aggregate open interest was 65% higher and BitMEX XBT funding was 10 times higher. This time around, leverage in the crypto ecosystem is much lower. Trader and economist Alex Kruger said,
“The practical meaning of this is simple: #1 more room for a FOMO run. #2 less room for a massive dump..”
“It is impressive to see price making it this far without excessive leverage building up.”
It’s Massive, “Odds of a ripper above 10K increased exponentially”
This jump in price came after the news of macro investor Paul Tudor Jones buying bitcoin as a hedge against the inflation in the market.
In his market outlook note, he bet on bitcoin to be “fastest horse” which reminds him of gold in 1976. In the current environment of money printing, he sees a “growing role for Bitcoin” as a hedge.
He first dabbled in Bitcoin in 2017, only to exit the trade near its peak after doubling his money. He said,
“The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by Covid-19.”
Economist Kruger sees,
“the Tudor buying bitcoin futures news as massive. This calls for sitting on positions rather than trading actively. Odds of a ripper above 10K increased exponentially.”
BTC Weekly: Descending Broadening Wedge
$14,000 here we come?
PLZ SIR! pic.twitter.com/3jIKOT9c5F
— Nunya Bizniz (@Pladizow) May 7, 2020
Expect HORRIFIC Volatility
Macro investors and bitcoin supporter Raoul Pal also shared “Bitcoin Porn and The Perfect Set Up” with three charts that call for higher price targets.
The Perfect Wedge via classic charting techniques gives a price target of around $40,000 and The Perfect Wedge on a Log Chart gives a potential run to $1 million.
The Perfect Regression Channel meanwhile gives a 1 standard deviation move to $400,000 and a 2 standard potential to $1m (potential).
With today's higher move, “the probability of vastly higher prices has risen dramatically,” he said.
Bitcoin’s uptrend came almost at the time of halving while the central banks around the world are either printing money like crazy or seeing their currencies collapse to the US dollar.
“HUGE quantitative easing fiat meets the hardest money that automatically quantitatively tightens. BTC wins.”
This according to Pal is one of the best setups in terms of the technical, fundamental, flow of funds, and plumbing. As such, he warns of “HORRIFIC volatility (both up and down).”