Can Bitcoin defend its 100 Billion Market Cap?

tradealert (60)in #cryptocurrency • 6 years ago

Hi traders, let's look at Bitcoin.

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Bitcoin.

As was expected, Bitcoin hit strong resistance at $6500 due to a lack of market interest above $6500 as revealed by volume profile (yellow/blue indicators), notice the huge dip in volume above $6500.

The intra-day momentum has resumed auctioning down and the market is holding its breath as uncertainty looms over whether or not the bulls will defend the $6000 mark against the bearish odds of a descending triangle pattern:

As we talked about many times before, that large volume well right below $6000 is acting as natural support for the price and would require a lot of selling pressure to break through it.

Such pressure can be obtained by piling a sufficient amount of leveraged shorts but this trade has become crowded and vulnerable to short squeezes.

If the bears did mount a successful rally and $6000 broke however, I believe we would quickly zip through the volume well and quickly hit its bottom (the point of lowest volume) which is roughly around $5000 before hitting resistance.

Strategy.

Most of the shorting is done on BITMEX, an unregulated exchange where, I suspect, most users are unsophisticated retail traders looking for a quick buck.

When a trade (in this case shorting Bitcoin) becomes crowded with "dumb money", it's usually a good idea to bet on the opposite outcome.

Furthermore, large players have seemed dead set on defending the highly symbolic 100 Billion Market Cap for Bitcoin since at least February.

Bitcoin price, charts, market cap, and other metrics CoinMarketCap.png

All of that gives me confidence that there is a good chance we've already bottomed and the market is now in waiting mode for the Bitcoin ETF decision coming at the end of the month.