Yesterday, the bitcoin price dropped by 6.6% as it went down to $11,150. Today, the prices went down even further only to make it back to $11,500. Denis Vinokourov of Beqaunt said,
“The unwind of bullish positioning was clearly evidenced in the options skew, however, the correction was largely limited to the front-end of the curve, while the back-end held largely steady, which supports the view of profit taking flow.”
Until the price breaks below $10,500, bulls aren’t in any danger in the short term. They just need to “reclaim $11,500 price to continue moving up to daily high at $11,900. Reclaim $11,900 on a daily close, and we go up to $12,500+,” said trader Josh Rager.
However, as we reported, the digital asset wasn’t alone in this correction as the spot price of gold has fallen more than 7% since yesterday, going as low as $1,862. The yellow metal is back at around $1,934. Sentiment, further pointing out how bullion pulled back more than the digital asset noted,
“Gold continues to look like a legitimate leading BTC indicator during these uncertain times. There appears to be a continued simultaneous interest in these two non-fiat stores of value,”
This sharp multi-asset pullback was the result of bond yields surging — the yield on 10-year Treasury jumped to 0.673%, up from 0.51 earlier this month, last seen over a month back.
Much like the correction seen yesterday, we would see many more along the way that may even extend for weeks or months, “but the trend should remain,” said trader and economist Alex Kruger.
“The larger trend remains: continued stimulus keeping real rates negative and pushing everyone out the risk curve. This is a long term trend,” he said.
On the way to New Highs, it is!
The markets have been enjoying a euphoric time before this correction. Even the stock market was affected by this, which was just 0.17% away from its all-time high when the S&P 500 took a drop of 1.4%. Today, it has again opened higher.
Amidst this, tech companies are working on enticing retail investors as after Apple; now Tesla has announced a stock split. Mati Greenspan, in his daily newsletter Quantum Economics wrote,
“Looks like we're in the midst of a rather sharp multi-asset pullback. Precious metals, the top-tier tech stocks, and even the crypto market are all down today.”
Although the analyst had expected this to happen, he was anticipating a US dollar rally, but “the currency market remains as unexciting as ever throughout this massive move.” As such, “this dynamic can make it very difficult to predict what's going to happen, especially in the short term,” he said.
The largest digital asset was able to stave off the deeper losses, but still, it isn't promising as Charlie Morris of ByteTree said,
“I’m disappointed by Bitcoin price action today. Down less than gold and silver, which is good. But responding negatively to bond yield spike.”
“My high hope was it had “value” credentials. Did you know that 95% of BTC’s gain to date coincided with a rising bond yield?”
However, he noted in his company’s blog that what’s not many are not realizing is that the world’s leading cryptocurrency is actually “quickly creeping” back to its all-time high of $20,000.