THE CRYPTO MARKET CONTINUES ITS EPIC RALLY

Last week, the crypto market continues its epic rally, with Bitcoin leading the charge. The total crypto market cap exploded past one trillion dollars as coins and tokens hit their highest in months. According to coin glass, over 300 million dollars of short possible positions were liquidated. This pale in comparison to the billions of dollars of short liquidation in the previous week but the squeeze effect was the same. The trader who bet that the crypto market would go down has to buy the crypto they bet again cut their loss and this buying pressure contributed to the rally.

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The crypto that rallied the most out of the top 100 was Aptos, raising over 60% in the last seven days. This rally appeared to have been due to a combination of a short squeeze and the popularity of Aptos in Asia, especially China. A few days ago was China's new year and this could be played a role in the APTs pump. Besides that, they don't see to be even crypto-specific factors that cause the market to move higher. They have been speculations that whales are manipulating the market to cash out. This was because many of the altcoins that pump have VC unlock come up.

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As most of you know that the crypto market is highly correlated to the stock market. As it so happened, the stock market has been rallying over the last few days as were. This is because investors as expecting the FED to signal that they will be pausing or lowering interest rates at its next meeting on the first of February. Investors have this expectation because central banks have ultimately been raising interest rates to fight inflation and inflation has been coming down the recent months. The thing is, the Central Bank since to believe that tight labor conditions could lead to another wave of inflation.

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It is quite clear that the crypto market is getting overheated. Although there was a bit of correction last week, most cryptocurrencies are not consistently over-bought on long-term time frames, not just short-term time frames. Not only that, there seems to be some divergence forming. Bitcoins price is porking above the Bolligan band range and the RSI is over 80 on the weekly chart. Both are signs that BTC is overbought in the long term. Meanwhile, BTC's trading volume as being declining while its price has been raising. This divergence between price and volume suggests a reversal is coming.