After falling under $10,000 briefly yesterday, bitcoin started moving upwards today.
But that didn’t last long.
The leading digital currency went north to as high as $10,446 only to make its way downwards, going to $9,950, much like it has been doing for the past week.
Bitcoin is currently trading just under $10,000 in the red, with $1.9 billion recorded in daily volume.
Meanwhile, popular stablecoin USDT is managing double the bitcoin’s volume with its market cap now fast approaching $15 billion.
Exchanges are also currently holding more stablecoins and fewer Bitcoin compared to the beginning of this year. This means there is “intense buy pressure” on bitcoin, reflecting more room for a bullish trend but that market doesn’t seem inclined for an upwards move.
“On bitcoin weekly open/close, a nice Cup pattern after a 300% move off bottom. Volume profile fits. The caveat is the March capitulation (Invalidates). Given the global COVID selloff, coupled with BTC extreme vol, might be excusable,” said analyst Bob Loukas.
According to analyst Don Alt, $10,500 is a “strong resistance” currently, which he expects to get sold into. Agreeing with the assessment, trader Ledger Status says, if bitcoin is unable to hold $10,200, we can go to $9,200.
Around this level is a “logical area of support” for BTC as it is a daily 200MA where there would be a breakout or retest of the downtrend. “That's not to say we can't wick through that zone and close above it, though. Just a clean area for a spot position for this uptrend,” said another trader.
“Consolidate under $10.5 for recovery and move back to $11.5k. $11.5k big resistance imo now,” is what Ledger Status feels about BTC’s move.
Although BTC made a small step upwards, there is no knowing yet if the digital asset would sustain these levels. The crypto market is waiting for the stock market to open and see how it performs today.
The VIX Index, which represents the market’s expectation over the coming 30-day, has already jumped to the highest level in more than two months, and BTC tends to follow the S&P 500 when the volatility increases.
Regarding VIX’s movement, Goldman Sachs said this top fear gauge of Wall Street is flashing a warning signal not seen since the dot-com bubble burst in early 2000.
US stock futures are signaling a red day as they slip after the Labor day holiday. Investors remain jittery about the sharp reversal in giant tech stocks, with the market popular Tesla shares sharply lower in premarket trading.
Interestingly, bitcoin’s one-month correlation with the equity market is back on the rise at 56.5%, up from 18% on Sept. 2nd, as per Skew. BTC’s one-month correlation with gold is also on the rise, currently at 23.5%, but still far off from the peak of 68.9% reached on August 7th.
For the past five days, the sentiments in the market have also turned to “fear” with a reading of about 40, a U-turn from the “extreme greed” just last week with a reading of 83, as per Crypto Fear & Greed Index.
But popular trader Loomdart is “so bull,” and it is because the CME gap at $9,600s is a breakaway gap, “so if we are still in a bull trend it shouldn't be filled. The gap at 10600 however isn't a breakaway gap so it should be filled.”