Skip to main content

Data Shows: Traders Unconvinced Of Crypto Bounces, Will Shorts See Pain?

After briefly re-testing higher levels, Bitcoin and the crypto market retraced and gave back the gains obtained over yesterday’s trading session. The general sentiment in the market has been negative, with a large majority of participants expecting further losses.

At the time of writing, the price of Bitcoin trades at $19,600 with 3% and 8% in losses over the past 24 hours and 7 days, respectively. The first crypto by market cap is one of the worst performers in the market, only surpassed by Dogecoin and Ethereum with a 4% and 3.7% loss over the last day.

Source: Crypto total market Tradingview

On the daily chart, the total crypto market cap was consolidating between $800 billion and $1.2 trillion coming in from a massive crash during April and June. The sector was trending upwards and finding support on a trendline that was pierced over the past week.

Thus, the sector might be unable to sustain its current levels as the daily chart hints at further losses and a potential re-test of its June lows somewhere around $800 billion.

Data from research firm Santiment highlights an important spike in short positions as digital assets trend lower. As seen in the chart below, traders have been shorting the price of Bitcoin as the price consolidates.

This has led to sudden spikes in funding rates taking them into the positive-negative territory, meaning traders are expecting bearish price action. The chart spells trouble for this market participant.

In August, whenever traders positioned themselves for more gains or losses, the market tends to trend in the opposite direction. Last week, shorts were hurt when the market trended upwards and then longs were hurt went the market turned in the opposite direction. Santiment said:

Traders continue to short whenever prices see a notable price dump. According to the $BTC average funding rate across Binance, BitMEX, DYDX, and FTX, the reaction to Friday’s drop was the most aggressive traders went against markets since May.

Source: Santiment Will Crypto See A Fresh Relief Rally?

Additional data provided by analyst Justin Bennett indicates that the crypto total market cap, as mentioned, broke below a bottom of an important trendline. However, Bennett believes the chart is suggesting a pullback into previous support.

As seen in the chart below, this could push cryptocurrencies to a 3% to 5% profit before a crash to around $800 billion. For the altcoins sector, this pullback could hint at a significant crash. Bennett said:

And to anyone who says altcoins won’t pull back that far…They already did once. Alts pulled back over 90% during the last bear market. So, to think they’ll stop at -74% this time with raging inflation, a global recession, etc. is naive, in my opinion.



from NewsBTC https://ift.tt/aZHfes7
via IFTTT
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

DeFi isn’t dead, it just needs to fix these 3 critical problems

It’s been a rough year for DeFi, and it may not get any better until projects focus more on security, regulation and usability. The persistent challenges  decentralized finance  face have been well documented by a handful of analysts and the recent collapse of the Terra ecosystem re-enforced the fact that something is critically wrong with DeFi. I think DeFi today is completely broken for 99% of the population. The promise of a more transparent financial system has been overtaken by greed. UST/LUNA is just the latest in a string of bad developments: — Peter Yang (@petergyang) May 11, 2022 Let's take a look at what experts say DeFi needs to do in order to have another revival.  Improved usability To date, the promise of open and uncensored access to a global decentralized financial system has been largely hampered by the complicated interface, confusing multi-step staking processes and lack of clarity surrounding the yields on various tokens. What do you thi...
Post a Comment
Read more

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

How much is too much? Crypto art market brings together deep pockets and big artists

In the future, owning unique art won’t be restricted to the elites, but will everyone have digital art on their walls? With the nonfungible token market approaching the frothing point, perhaps it’s time to sit back and ask: “What’s happening here?” The $750,000 in proceeds from the recent sale of a single “alien” CypherPunk NFT, after all, could have paid for a reasonably sized house. The crypto world at large is only 12 years old, entering adolescence, but crypto art — art on a blockchain — and nonfungible tokens are just out of their terrible twos. The launch of an epoch-defining CryptoKitties goes back to 2017 and 2018, and Ethereum’s nonfungible token, ERC-721 — which is used by many digital galleries and also non-art NFTs — wasn’t developed and rolled out until early 2018. What is being discussed here is still very new. Moreover, Bitcoin ( BTC ), the world’s first blockchain project, was initially just a more efficient way to transfer money, though it soon became more — a k...
Post a Comment
Read more