BITCOIN, FED-Dump, Binance Buys 43000 BTC, Objections Now!

8 בינו׳ 2022

The recent times were turbulent for Bitcoin, a massive volatility move resulted out of the fact that the FED released its protocols of the last meeting in which a decision of a possible decrease of their balance sheet which is currently 8.3 Billion US-Dollar was made. There was no action behind this statement made so far nevertheless we have seen Bitcoin heavily dumping just seconds after this statement was released. The declines did not only show up in Bitcoin but also other worldwide assets such as the stock market and gold. This shows how fragile financial markets are especially on exterior influences such as the FED coming up with new decisions while there wasn't any action behind, it is pointing out that such events can have a pivotal effect on the market and that we as traders can prepare on these events with the proper line-up.

Binance Multi-Billion-Dollar Bitcoin Purchase:
This dump was clearly initiated by the FED-release which accelerated the dynamic and taking this into the consideration now the good news is that the dump did not emerge because Bitcoin loosed its value or because the users, many panic sellers came up or users lost trust in Bitcoin like it may be the case in other situations. In fact, it is the other way around, within this Bitcoin dip institutional interest actually profoundly increased from a technological adoption standpoint as well as from an accumulation standpoint as I already mentioned in my YouTube update uploaded recently. Binance in this whole dip made a MASSIVE purchase of 43000 BTC which is actually equivalent to around 1.800.000.000 BILLION US-Dollar, this makes Binance almost the second-largest Bitcoin institutional treasury holder after MicroStrategy. These facts show a clear surge in institutional interest while Bitcoin made the dump caused by the FED announcement.

Bitcoin Leverage-Ratio At A All-Time-High:
While Bitcoin continued its downward journey after peaking at 69.000 USD in November 2021 there was a steady acceleration of leverage used in the exchange to trade Bitcoin, this dynamic made the leverage ratio of Bitcoin go up and it shows also that more and more leverage is used to trade Bitcoin. As Bitcoin initially stopped with its downtrend at the 4th of December and moved into the trend-finding phase the leverage ratio still moved up simultaneously while the volatility decreased. Taking this into concern it has to be marked that it is likely that an increased volatility phase is awaited as the contraction of Bitcoin settled while the leverage has still gone up this is likely to accelerate and increase price actions when stop losses are hit. Such a dynamic can go in both directions however as Bitcoin is already dumped heavily there is a higher potential that stop losses of short order actually will be triggered.

Technical Developments And Bitcoins Upcoming Destinies:
As when looking at my chart we can watch there how BTCUSD now continued to move on to test this main 41.350 USD support level which is marked in my chart in blue. This is a crucial level for Bitcoin as it already bounced several times off and on this level, with this fact there is a higher possibility given that Bitcoin managed to bounce again in this level however if this does not happen and Bitcoin falls below it will be the new resistance in this case. Besides, that Bitcoin is forming this main descending-triangle formation which can be completed if Bitcoin manages to hold the support however if this does not happen and Bitcoin rejects off the remaining resistance at 45.900 USD and pullback again this will invalidate the whole formation. For now, it will be highly crucial to watch out of the whole formation can be completed or not because in this case, we should not underestimate a possible volatility-increase and an invalidation of the formation. As traders we need to think into both direction and plan several scenarios into the market approach to act accordingly if one or the other scenario actually emerges, this is also the case here.

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Information provided is only educational and should not be used to take action in the markets.