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BTC Bounces as Short Traders Risk Getting Caught in the Crossfire

Bitcoin appears to be attempting a mild recovery within a range-bound environment. The bounce comes as a sigh of relief for hodlers everywhere as the news from El Salvador breathes new life into a faltering bull.

Let’s dig in.

Economist who Said Inflation Was Dead Now Believes it’s Alive

A quarter of a century after declaring the death of inflation, Roger Bootle is anticipating its rebirth.

Referring to the inflationary pressures on the horizon, Bootle said:

“It is the start of a sea change, I have to say. That’s not to say that we’re going to go back to the strong inflationary conditions of the 70s and early 80s. But at the very least, I think we are at the end of the crypto-deflationary period that we’ve been in for the last few years.”

Check out the full article here!

Technically speaking

Bitcoin bounces within the Range

BTC/USD fell to $31,000 before buyers stepped in to pick up some cheap bitcoin. Since the local low BTC rallied 18% and currently trades above $36,300. Bulls have overcome a pivotal price point which should provide impetus for a sustained relief rally to the upper-bound of the range.

On the flip side, if BTC/USD slides below the pivot and fails to bounce at $33,470, then a test of the $30,000 level would be next.

However, open interest and short traders appear to be doubling down according to data from coinalyze, painting a somewhat large target on their backs for a serious short squeeze.

All in all, market structure still suggests a ranging market, and relatively low volumes confirm this thesis all the more.

Levels to watch

  • Reclaim $43,000 level (20-weekly EMA) suggests a move to $50,000.
  • Rejection from the $40,000 (psych level) suggests a retest of the pivot.
  • Close below $35,800 suggests a test of $33,470.
  • Weakness below that suggests a move to $30,000.

Exchange inflows slump to pre-bull-market lows

Meanwhile, bitcoin transfers to exchanges have reduced significantly to pre-bull market lows when measured on a 7-day Exponential Moving Average.

This suggests that current market participants are not keen on selling coins on the open market at these prices. The data describes increasing hodling behaviour and is a sign that weak hands (short term participants) are largely out of the market.

Bulls lead the way.

Catch you next time.

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Read More: El Salvadore Officially Adopts Bitcoin as Legal Tender

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Christopher Attard
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Chris on Crypto

Chris on Crypto

Journalist-turned crypto-writer & analyst; forging the narrative, stacking sats.

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