Data Shows: Traders Unconvinced Of Crypto Bounces, Will Shorts See Pain?
August 30 2022 - 1:46PM
NEWSBTC
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. Related Reading: WATCH: Bitcoin Versus DXY And The
Dangerous TD9 Setup | Daily TA August 30, 2022 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. 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. 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. Related Reading: Why
Is Shiba Inu’s $BONE On The Rise And Is It Time To Get In? As seen
in the chart below, this could push cryptocurrencies to a 3% to 5%
profit before a crash to around $800 billion. For the altcoins
sector, this pullback could hint at a significant crash. Bennett
said: And to anyone who says altcoins won’t pull back that far…They
already did once. Alts pulled back over 90% during the last bear
market. So, to think they’ll stop at -74% this time with raging
inflation, a global recession, etc. is naive, in my opinion. Maybe
another +3-5% for #crypto before we get some significant retests.
👀$TOTAL pic.twitter.com/ewUIAXPpRI — Justin Bennett
(@JustinBennettFX) August 29, 2022
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