‘Looks Bad’ â€” Bitcoin Futures Echo Days Before March Crash, Says Trader
Analysis of futures behavior is strongly reminiscent of the days before BTC fell to $3,600, Cointelegraph Marketsâ€™ filbfilb warns.
Bitcoin (BTC) futures were worrying analysts on July 10 as volume data suggested serious weakness and the potential for a major pullback.
Filbfilb: BTC futures â€œalmost identicalâ€� to March
â€œLooks bad,â€� he summarized, noting that a volume indicator had returned to an identical setup as the week before Bitcoin crashed to $3,600 in March.
â€œAlmost identical positioning as the big drop last time and a clear descending triangle full of wicks at resistance, trading below (point of control).â€�
Specifically, commitments of traders (COT)Â â€” both retail and institutional â€” had maneuvered to exactly the same place that it was in just days prior to the crash. COT is updated on Fridays using data from the previous Tuesday; as such, the metric gives a snapshot of the status quo several days previously.
â€œI doubt it has changed much,â€� filbfilb told Cointelegraph in private comments.Â
CME Bitcoin futures chart with March similarities highlighted. Source: filbfilb/ Twitter
COVID-19 dump to be avoided
Bitcoin has seen mixed price action this week as moves towards $9,500 were dictated by stock markets. A drop late Thursday took BTC/USD back to $9,000 support.Â
Asked whether traders should expect an exact rerun of March, however, filbfilb remained more optimistic.
â€œI don’t think there will be a dump anything like last time,â€� he wrote.
â€œHowever; the positioning of the big players began 8.5-10.5k last time & that was before the climate took a nose bleed- these guys are short here on technicals rather than the external risk (in my opinion).â€�
Bitcoin derivatives have sparked differing narratives in recent weeks. In late June, a $1 billion open interest expiry event initially fuelled speculation of a price drop, but ultimately had no discernable impact on the market.
Other Bitcoin network fundamentals remain strong, with hash rate reaching all-time average highs this week and difficulty set for a 9% upward adjustment in two daysâ€™ time.
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