The trader Илья Мещеряков explains the current market situation.
The cryptocurrency market began the week with optimism. Yet despite a roughly 10% daily rise, a full recovery remains distant. Bitcoin’s dominance index hovers around 50%, and the asset’s price at the time of writing stands at $53,000.
From a mid-term perspective we observe a critical point of the downtrend. The three waves, discussed in the previous overview, and movements below $50,000 are sufficient to flush a large amount of open interest in longs.
At the moment we have seen a rebound after forming a local low — a signal that could be read as either a short-squeeze or the start of a mid-term uptrend.
The downward move itself ran straight to long-leverage liquidations of 1:10 from the lower boundary of the current range (shown in blue above). The signal is only a mild scare, not a global coin dump.
The local picture implies important levels of $53,260 and the previously breached $51,260 — from these levels one should expect support from sellers for further upside. Resistance will be at $54,650 and $56,000 — from these levels pullbacks are anticipated if the uptrend continues.
Short-term optimism is unlikely to allow Bitcoin to recover in a couple of days. The current reversals to long positions by traders provoke local declines, so leverage should be used with great caution.
The long-term outlook remains positive, but clearly implies holding fiat for potential additions on deeper pullbacks.
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