Bitcoin (BTC) firmly recommitted to its trading range on June 7 after a fresh move higher was met with a swift sell-off.
“Some of the best chop we’ve seen”
The pair had delivered daily gains in excess of 6%, but the approach to $32,000 changed the mood, and Bitcoin gave back almost $2,500 in a matter of hours.
A classic “Bart Simpson” structure thus formed on hourly timeframes as frustrated traders came to terms with the existing paradigm remaining unchallenged.
“Standard price action again on Bitcoin in which all the lows are swept,” Cointelegraph contributor Michaël van de Poppe wrote in a Twitter update.
“If we hold around $29K, still presumably enough reason to go for a slight run. (And $29K area is still CME gap territory).”
In addition to the CME futures gap providing a potential target at levels seen before the gains, on-chain analytics resource Material Indicators noted significant buy interest already lined up at those levels.
#FireCharts 2.0 (beta) shows $60M in #BTC bid liquidity popping up at $29k. Whether it gets defended, filled or spoofed determines the next trade. #crypto #tradingstrategy https://t.co/iCsO8yQgDB pic.twitter.com/Du6uXRc9U1
— Material Indicators (@MI_Algos) June 7, 2022
Should that not hold, targets focused on the area around $28,000 next.
Not much of a reaction, melted through it, so this level is now likely to act as resistance. At this point I think we are probs headed to the lows with the red “x”. May see some relief in between. Again, all this sideways chop/ranging is part of the bottoming process imo. $BTC https://t.co/vx7qpIaUjf pic.twitter.com/x3pwqEjFeN
— CrediBULL Crypto (@CredibleCrypto) June 7, 2022
“I will simply be looking for short opportunities in this range,” fellow trading account Crypto Tony continued, nodding to the overall downtrend continuing.
“Either we lose the range low and will short a retest, or if we retest the EQ of the range and reject i will look for a short position. Flat until one of these triggers plays out.”
One market participant not at all surprised by the short-timeframe action was Filbfilb, co-founder of trading platform DecenTrader.
“Some of the best chop we’ve seen tbh, high quality stuff,” he joked.
“I’d say it’s always the same, people desperate not to miss the ‘bottom’ but this one is particularly funny how it’s instantly reversing. Trade chasers getting absolutely ruined.”
Long traders battling volatility sparked 24-hour liquidations totaling $60 million for BTC and another $158 million on altcoins, data from analytics platform Coinglass confirmed.
Stocks correlation blurred
Bitcoin altcoins thus severely underperformed compared with notionally correlated United States equities.
Both the S&P 500 and the Nasdaq Composite Index finished the June 6 trading session above the open, putting their relationship with crypto in question.
Yassine Elmandjra, a crypto asset analyst at ARK Invest, nonetheless noted that Bitcoin’s overall correlation to the S&P had reached new all-time highs on a rolling 30-day basis.
Bitcoin’s correlation with the S&P 500 reaches an all-time high. pic.twitter.com/jwT5KQWeIQ
— Yassine Elmandjra (@yassineARK) June 3, 2022
Discussing BTC price action further, he argued that “major” trendlines remained intact on BTC/USD, even given May’s dip to $23,800. This, as Cointelegraph reported, was still ripe for a retest in the eyes of many.
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