Bitcoin to $70,000?
BTC/USD has been through five bouts of relatively heavy selling pressure since the $8,000 price tag. Thus far, these prolonged de-leveraging and profit-taking events were followed by a strong continuation upwards, and the pattern appears to be playing out once again.
At the time of publishing, BTC/USD exchanges hands above $57,800, supported by the daily Bollinger Bands and the 20-daily exponential moving average (EMA). Downside liquidity was largely wiped out by the end of April as bitcoin reconfigured, and open interest slid to the $16 billion mark.
At the Monday open, the 20-weekly EMA adjusted higher to $47,000, setting a new baseline for bull-market continuation. Needless to say, while price can traverse below this level for several days, a weekly close below this moving average would not bode well for this bull market.
Per the above chart, bitcoin’s immediate short-term trouble areas are $61,700 and $63,500, respectively, after which the skies are blue for $70,000 and beyond.
Meanwhile, Ethereum has taken out the $3,000 landmark barrier — and it has done so with relative ease and without obvious signs of overheating.
The second-largest cryptocurrency has witnessed nine consecutive days of green price-action and continues to edge higher towards our secondary target at the 1.618 Fibonacci level ($3,500).
Per data from Coinalyze, significant open interest accrued for the cryptocurrency as traders placed their bets then doubled and tripled down.
However, funding remains relatively evenly matched. In fact, perpetual swap funding rates are lower than one would expect at all-time-high valuations, indicating a relatively level-headed market.
Under present conditions, it’s conceivable that a significant portion of the open interest is upside liquidity (shorts), which could act as rocket fuel for ETH/USD.
Additionally, the continued upward-sloping grind indicates that ETH/USD is growing organically and not just speculative short-term trading.
As prices head higher without pause, it looks like short traders might be underwater and in danger of getting liquidated. After all, outstanding contracts must be settled one way or another.
Naturally, there is no such thing as an ‘up only’ market — so pull-backs to moving averages should come as no surprise. As noted in the telegram channel, the $2,500 level is a point of interest for potential price reversions. But provided the immediate 4-hour EMA support ($2,950) remains in tact, there’s little reason to expect a deeper pull back at this time.
Catch you next time.
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