BTC- New trend in the development...? (sentiment, liquidity)BTC is off to the good start this year! Can it last though?
I will spare you the head and shoulders bottom. Let's focus on the sentiment analysis because I think it provides important clues for the potential trend reversal.
It is good that BTC broke out of the 6 months downward channel with above average volume on the daily timeframe and also managed to bursted through two resistance lvls in the process. Both are good indicators of potential trend reversal.
This price move will be more convincing If the price can manage to close the daily above 8.2k to 8.3k
On the fundamental side, Iran news and all-time high hashrate might have something to do with this price spike or it might be the pure technical move.
It is still too early to rule out the possibility of liquidity raid even though I suspect most of the shorts at this lvl have been taken out already during last year's Oct price spike.
Quick glance at the latest COT report about CME futures indicates that institutional players are still overwhelmingly net short, which indicates the ongoing distribution process.
I am waiting for the Bitmex funding rate's green bar to go higher, which could signal the potential bullish sentiment.
Backwardation suggests that investors still believe that BTC price will keep going down. Again, bummer here.
That being said, it is worth noting that all these sentiment indicators are lagging so it is better to check them again next week if the price momentum continues.
I will pay attention to the open interest and volatility and be wary of any big orders in the orderbook in the upcoming days.
IF BTC can manage to attack 8.8k to 9.2k and consolidate around that price range, then the bull reversal might be on the horizon. If the price stalls around 8k, it could be a good time to buy on the pullback.
Oh! Iran just fired missiles to US bases! If you buy into the notion that BTC is the digital gold and is uncorrelated to the stock market (we could use more evidence on the correlation), then that is one more reason to be bullish on BTC.
