It has been rather boring on the news front regarding cryptos lately. The whale long marked recent highs, and as we suggested that long trade had to be absorbed by the market.
A few weeks later, Bitcoin is back to the gap lower level we saw in early August, confusing people again.
We suggested the 6k level was a huge level to watch as weak hands changed with strong hands. These type of consolidations are important for all assets during the hungover phase, especially post parabolic moves like the one we saw in Bitcoin last year.
The negative trend (green line) is still in control and it is interesting to see how price action continues frustrating both longs and shorts.
The consolidation will probably continue for longer, but the aggregate psychology is becoming increasingly interesting to watch here. Shorts have tried pushing Bitcoin sub 6k but it held. Longs have tried pushing it higher, but the negative trend has been strong, resulting in sell offs for the Bitcoin.
This last uptick is becoming extra interesting since the crypto has moved higher without any significant news hitting the market. Note how the 100 day average (green) is flattening out, signalling the negative trend is losing some steam in the short term at least. Also not how the 50 day average is actually starting to be positively sloping for the first time since the massive move lower in January.
All in all the consolidation is getting interesting and potential breakouts are moving closer. 8k is still the big resistance to watch for bulls and 6k is the support to watch for downside moves.
Source: chart by Bloomberg