Bitcoin’s impressive rise is a breath of fresh air for all the survivors of this bearmarket. However, altcoins are also starting to perform, which tends to encourage investors to get on board aggressively. Never a good thing.
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For a few weeks now, Bitcoin has been on an unstoppable uptrend, not even deigning to pick up liquidations from Bitcoin buyers. A train that has left, clearly heralding the end of the Bearmarket.
However, a climb always ends. The question is, when? Will there be good opportunities to re-enter? What’s the current state of the altcoin market? So many questions that seem simple, but whose answers are always diverse.
Bitcoin, a steady rise
Looking back, few retracements have taken place once Bitcoin decided to start rising again.
In fact, only the Covid-19 blackSwan event had a retracement above 40%. Otherwise, no monthly wick has retraced lower than 40%. With the market becoming less volatile over time, we can expect it to become shallower and shallower. At present, this would mean a maximum retracement of around $25,000, should the climb stop, which is not necessarily the case.
In particular, we can see that very large short positions, liquidations or sales, are at the $42,000 level, while few buying liquidations are accumulating on Bitcoin.
Do we have the signal for our maximum top on this chart?
Altcoins, a FOMO in the making
The bearish touch is mainly on altcoins. Why is this?
Highly volatile green candles are characteristic of altcoins. However, human beings who see green tend to catch fire very quickly. The proof is on social networks, particularly with the recent price increases of tokens such as Solana, Matic, Elrond and so on. But another good way of observing it is orderflow :
And then the drama begins. We’re already at over 8 billion open interests. The past has shown that this level is critical for setting up FOMO and bearish reversals to prevent too many altcoin gains. Funding supports this thesis, with a gradual rise towards the green, while few sellers are being liquidated in proportion.
However, one thing to bear in mind is that, overall OIs (Open Interests) should rise over time, as the number of people in the market increases. But there are few, if any, newcomers arriving, so this increase is due to traders/investors already present on the market!
We want to believe in this rise and that it will continue. Who are we to wish for red candles and not make money? At least virtually.
However, a feeling of FOMO is building up for altcoins, particularly in anticipation of a potential altcoin season. This means that most altcoins are likely to outperform Bitcoin and thus perform well.
Unfortunately, the current retracement is not very representative of an altcoin season! We’d need several weeks of altcoin bullishness to hope for such a conclusion, and it seems a little early in the cycle to see this phenomenon taking hold!
As a traditional aside, tomorrow (Tuesday November 14) will see the announcement of inflation rates! This is an important milestone for the future decisions of central banks, but also for market volatility on the day.
I hope you enjoyed this article, and I’ll see you next week for even more analysis! Have a great week!
Entrepreneur & Dad, passionate about cryptocurrencies, I describe for you the technical analysis. Cofounder of Cryptocademia, a free platform to learn all you want/can about blockchain ! Meet you there at https://www.cryptocademia.com
My job: look at charts and interpret them for you.
Beware, I do not know all the truths.