Dark times ahead for Bitcoin?

While bitcoin has been sinking for the past few days, with a bearish break, altcoins are being shorted on a massive scale. What can we expect? Is everything black? Let’s find out!

Warning: This article does not constitute investment advice or an invitation to invest. It is for information purposes only. You are the only one responsible for your trading and investment decisions.

Don’t forget, too, that when it comes to trading, it’s essential to at least secure your winnings in a cold wallet. For an easy-to-use cold wallet, we refer you to D’Cent, that we have already presented. We would like to thank them for sponsoring this column.

Best start to a vacation

Note: This article was written before the current pump.

“Title a bit weird” you might say! Well, almost, except when you consider that I went on vacation from the evening of Wednesday 16th and that all the red happened on the 17th! Perfect timing, or worse, to each his own point of view.

A fall and a beautiful one. Following my departure, bitcoin took a nice -14.39% wick to wick on Binance’s perpetual. We even went as far as $24,777. We’re now hovering around $26,000, a good point, as this range appears on the 0.382 Fibonacci level, i.e. the first stop. As a reminder, this level must be held if we are to maintain an uptrend, even if, when you look at the chart, you think there’s going to be a problem.

What counts is to trace the supports which will enable you to look at the key levels where a long-term purchase could be strategically interesting. But watch out for the traditional market, which is on the brink of collapse with a major crisis due to hit the United States.

In the event of such a crisis (which is very likely, given American debt levels, rising interest rates and the current real estate crisis), a clear target would be the general support that held in October 2022, around 3500 points, i.e. a nice -23%. This should lead to an equivalent movement on bitcoin, if not more pronounced, i.e. surely around 35-40%, i.e. a target of around $20,000.

Well, enough of year-end hypotheticals and let’s take a look at our goal for the week.

This week’s menu

As previously stated, this bearish breakout was a real disappointment in terms of price, although the price easily held the first stop of the climb.

So will we get a fresh start? Is this breath of fresh air enough to prevent others from jumping on the bandwagon? That’s the question worth asking!

But this week, a quick check-up of the orderflow is in order!

Interesting data is starting to appear.

The first is that the long ratio has been rising steadily since the descent. You might think, there are plenty of longs, run away, but it’s more complicated than that, in fact, there are mostly short sellers who have sold their positions!

How do you know that? The liquidation wick is ridiculous!

This means a lot of positions have closed, and certainly shorts! Is this a good sign? Yes, whales generally have their hands on Bitcoin, so if they’re no longer shorting, we can rejoice.

Altcoins are incredible. Funding is just mind-blowing. It’s been in the negative for several days, which normally happens when you’re at the bottom of the market. Here, we’re not supposed to be, yet altcoins are being massively shorted.

Good news? Definitely! We should have a bullish comeback, because a fall in cryptocurrencies with funding like this would allow a lot of people to make a lot of money and that: that’s not possible!

Conclusion

Between the first stop holding and altcoins being heavily shorted, it’s hard not to have a bullish bias for this week. We may have a bearish wick before a departure to blast buyers with very big levers. However, it seems unlikely to me that bitcoin will fall with altcoin funding so negative.

In any case, whether a fall comes or not, think about using a cold wallet like the one from our partner D’Cent, so that your cryptos are really your cryptos! See you next week for a new technical analysis meeting! Have a great week!