The elevated long leverage mixed with the overhanging ETH locked in 2.0 and the mtgox coins are still keeping this market down.
I think this is simply trying to provide excuses for current price action. Although I hate to admit it, BTC has been highly correlated to stocks "risk assets" with have fallen dramatically this year.
Maybe I'm not looking in the right places, but I'm also not seeing much high long leverage right now, but more of a balance:
Longs vs Shorts:. https://www.coinglass.com/LongShortRatio
Liquidiation Data:. https://www.coinglass.com/LiquidationData
Futures: https://www.theblockcrypto.com/data/crypto-markets/futures
If anything, it seems that there is relatively low leverage right now, with futures volume currently at summer 2021 levels for example (<$2b as opposed to >$4b 6 months ago). Many positions already got liquidated earlier in the month, predominantly longs after breaking $30K but many shorts as well after the bounce from $25K level. Most won't want to short in oversold conditions, others don't want to long without confirmation of a low.
As for ETH locked in 2.0, I find it highly irrelevant, many of those longer term investors will eye up the opportunity to rotate back into Bitcoin I imagine, anticipating BTC to recover much faster than any altcoins (which has always been the case so far). While MtGox coins that may be released later this year, or in 2024, sure it could spook some investors, but this has been the case for over a year already. Yawn.
The support at $28K is looking more and more exhausted as it continues to be tested. I think there's a strong likelihood that the price will retest the recent lows in the $26K range. Hopefully that will liquidate some of the long leverage and bring the market into a healthier position to begin building support for the next wave of BTC to crash down onto it.
I agree that $28K is looking exhausted, even if bears are losing momentum after 9 weeks of selling. So re-testing $26K does "look" relatively likely at this point. But this can go either way based on current leverage data. Dropping below $28K would liquidate longs and likely re-test mid $20Ks, but moving above $30K-32K would otherwise liquidate shorts, pushing prices back into the mid $30Ks. Even if we are admittedly closer to breaking down than bouncing back to the upside. But I do agree it'd be healthy to build support at such oversold levels if that happens, better to drop asap than later with price no longer oversold.
It's the sort of "coin flip" scenario that unless you are trying to trade a risky break-out in either direction, then you'd likely be better off in both short & long positions with high leverage and simply trade the volatility instead. Given how degenerate the strategy of being both long and short with high enough leverage to make it worthwhile is, I'm not surprised there's low leverage in the market right now, due to lack of oppounrtity.
The on-chain data also suggests that 6-12 month holders who dumped 50% of their bags over the past 6 months are close to running out of Bitcoin to sell. Meanwhile, the 1 year+ holders (in particular 1-2 year holders) seem completely unphased by the drop from $69K. Notably the 6-12 months holders have now either dumped or become 1+ year holders since 6 months ago, even after buying in the mid $30K range. Hence why if not obvious the 6-12 month hodlers have dropped from 20% to 10%, while the 1 year hodlers have risen from 10% to 20%. Half of them dumped, the other half held basically, price dropped in half.
For reference sake, the volume data shows that 1-2 year hodlers predominantly bought at $10K as opposed to $30K or $60K (May 2020 - May 2021). So price will probably need to drop below $20K to shake these strong hands out the market. Returning to $25K or the 200 Week MA likely won't achieve much. After all, most bought BTC post-havling in the $10K-12K range, I imagine for the long-term as well.
https://www.lookintobitcoin.com/charts/hodl-waves/
https://www.lookintobitcoin.com/charts/1-year-hodl-wave/
In the past day or so I have been reflecting on BTC's somewhat gradual movements towards the UPpity, and in that regard, I appreciate the above fairly-detailed (at least point by point @ dragonvslinux) attempts at rebutting some of the seeming "inevitably downity" talking-points that OgNasty had come out with - and surely it is not the first time that I had seen some forum members presenting a variety of points proclaiming very high odds to DOWNity that seem to be attempting to create the impression that down is inevitable - when many of us know that inevitability in bitcoin is far from something that any of us should be relying upon, even if it seems that various cards are being stacked against King Daddy.
It seems that even in a few of my earlier responsive posts (here's an example of one of them) I had conceded that the evidence of DOWNity was appearing quite strong based on the seemingly record number of Bitfinex longs that were shown on the chart linked therein.... so in that regard, I was starting to consider that it would be hard to go up if there were so many (an apparent record number of) leveraged longs on Bitfinex.....
I had not exactly been clear in my own ways to attempt to analyze the information, including whether such leverage longs were reflective across other exchanges or even counter-balanced by other factors.
I know that there was another point that I was considering that the BTC price could still go UPpity, in spite of leveraged longs because there are also incentives for some of the bullwhales to reck the bearwhales based on what is likely to be an ongoing existing practice of leverage (and likely non-backed - aka naked) shorts that they maintain through a variety of bitcoin futures products... and in that regard, it seems that some day, their reckoning is going to come.**
**I touched upon that kind of reasoning in one of my earlier posts, here.
...what do you consider the odds for BTC prices to continue to go down if it has already corrected 63% (from $69k to $25,401)?
QFT out of that wall o text.
Well shouldn't we all be attempting to figure out those kinds of calculations - especially if we are betting on more down? We do have a bit of a problem of all those outstanding leveraged longs on Bitfinex (a record level, apparently), so not really sure how that is going to resolve itself if BTC were to go UPpity rather than down, except for that everyone gets a Lambo ......
Both Greg Foss and Max Keiser talk about such a "Gamma" possibility in their recent Swann Bitcoin podcast, which I just understood as Bitcoin's potential explosive possibility to the UPside that could come at any time.
Perhaps the punchline that I am trying to make here ends up being that sometimes some Upward momentum might be helpful for bitcoin to break out of a pattern that had been looking quite dire, and surely we are not in any kind of inevitability for UPpity pattern either, yet whatever UPward movements we have seen so far should have shaken some of the confidence that guys might feel in regards to DOWNity being inevitable - and surely it was helpful for me to see dragonvslinux go through some of the arguments to counter OgNasty's DOWNity proclamations - and I am especially considering that the leveraged longs on Bitfinex do not seem to be deserving as much weight as I had been considering them to potentially have - even if I was understanding that information and those Bitfinuex charts correctly or not... especially the ones that I responded to empowering's earlier post on the topic.
Got my extra 0.1btc
