Bitcoin pulls back before the next leg gets higher as ETF euphoria fades

Bitcoin fell below $ 60,000 to $ 58,184 today as euphoria fades over the launch of the U.S.’s first Bitcoin ETF.

Market participants will feel a sense of déjà vu on this recent sell-off, hoping it won’t be a repeat of the December 2017 bear market that some attribute to the launch of Bitcoin futures products CME and CBOE.

The Bitcoin ETF launched by ProShares and a second by Valkyrie is based on the CME Bitcoin futures contract.

Some will likely view the current sell-off as a short-term entry point into buying Bitcoin. However, there are a number of coins that counteract today’s downdraft.

Shiba Inu continues upstairs

Meme coin favorite Shiba Inu is trading 37% up at $ 0.0000655.

Polygon, Aave, Helium, Safemoon, and Enjin are all okay at the time of writing, and the DEX Aggregator and 1inch are up 36% to $ 5.49.

Cardano, Uniswap and Avalanche are among the hardest hit altcoins. The old favorites Tezos and EOS both lost double digits by 12% and 10% respectively.

68% of all retail investor accounts lose money when trading CFDs with this provider.

“Bitcoin has to cool down”

“I’m not surprised that Bitcoin hit a wall at $ 67,000 after breaking its April high, given the speed of the $ 30,000 move in July. Bitcoin has to cool down before it starts the next stage, ”said Antoni Trenchev, managing partner and co-founder of Nexo, a crypto lending platform.

That seems to suggest that we are not seeing the opening volleys of a return to a bear market, but instead are blowing away some of the foam of the FOMO-fueled purchases that pushed Bitcoin to new all-time highs of over $ 67,000.

If Bitcoin can get back above USD 60,000 in today’s US session, it will likely be taken as confirmation that we are not seeing a major correction.

Funding rates indicated an imminent sell-off

British trader Glen Goodman predicted today’s sell-off due to the high rate of finance – the cost of holding long positions in perpetual futures.

Coindesk reported a week ago that funding rates were at a six-month high of 0.06%, according to Bybt. The exchange rate is calculated every eight hours by the stock exchanges.

Funding rates have now come down, perhaps offering more comfort to those who bought near recent highs.

Funding rates for Binance (by far the largest player) can be found here. Rule of thumb – If funding rates for a lot of cryptos go above 0.1%, then be very concerned. Prices have now fallen back to a tenth of this rate. Https://

– Glen Goodman (@glengoodman) October 27, 2021

Building leverage available to retailers in the crypto markets adds to today’s volatility.

“The market has been leveraged for a long time for a few weeks, so there was this overhang in positioning,” Jonathan Cheesman, head of off-market and institutional sales at the crypto derivatives exchange FTX, told Bloomberg.

About Gary McFarlane PRO INVESTOR

Gary was the production editor for the prestigious UK investment magazine Money Observer for 15 years. He covered topics as diverse as social trading and fixed income exchange traded funds. Gary initiated the coverage of Bitcoin and cryptocurrencies at Money Observer and was a cryptocurrency analyst for the UK investment platform No. 2 Interactive Investor for three years until July 2020. In that capacity, he provided expert commentary for a variety of newspapers and other media outlets, including the Daily Telegraph, Evening Standard, and The Sun. Gary has also written a lot about cryptocurrencies for various industry publications such as Coin Desk and The FinTech Times, City AM, Ethereum World News and InsideBitcoins. Gary is the winner of the Cryptocurrency Writer of the Year at the ADVFN International Awards 2018.

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