$9900-$10000 are Key Levels For Bitcoin To Break Through
Using a logarithmic chart, we can see that it has respected the 38.2% Fibonacci level as its low and is currently testing the 61.8% fibonacci level.
This is a very classic technical bounce for Bitcoin , but it has had some fundamental help along the way with its correlation to gold during the Iranian tensions we saw a month ago that propelled Bitcoin above $8,000.
While I was at $8,000 until it was broken, I became with a break of $8,000 and got long at $8,200.
From a technical perspective, we are seeing funding on Bitmex start to reach yearly highs. This means that longs are currently paying shorts a higher premium to continue to hold their positions.
Bitmex uses funding on its perpetual swap contracts as a way to keep the price tied to spot. When funding gets too high, traders will close their positions due to the high cost of maintaining them.
Open interest, which is the number of all open contracts on Bitmex, also remains above $1 billion for the first time ever. Throughout all of 2019 every time Bitmex reached $1,000,000,000 in open interest, we would see a major sell off, which is not the case for this time.
Looking more into the technical side of Bitcoin , we have a structure that is forming on the daily.
It doesn't mean anything unless we see a break to the upside or downside on the .
Our level is also testing 70 for the 4th time in less than a month and looks to be forming an , which is typically a continuation pattern. If breaks above 70 and Bitcoin breaks above $10,000, it is possible that we will flip $9900 as a support and move higher.
Another aspect that we can see when analyzing the order books are major sell walls on Binance, Bitmex, Bitfinex and Coinbase at the $10,000 level.
For this rally to continue, we're going to need to see significant market buying to break the $10,000 psychological barrier.
While there are many fundamental events at play, Bitcoin remains one of the most technically clean charts out of all of the asset classes.
Based on volumes of the derivatives exchanges, this is a traders market more so than a fundamentalists market.
With the funding premium being as high as it is, it would make sense to see a high 'fake breakout' above $10k with a strong downside move to cool off before pushing higher.
Let me know what you guys think!
Either way, it's important we see $9900 flip first as support before we get overly excited to long at these levels.
A breakout without volume is almost always a fakeout. It’s what’s often called a “meltup”; and yes it looks like a bull, moving averages move like a bull, ichimoku dances like a tempting geisha; however not long sustainable in a declining volume.