Bitcoin stands at a crucial juncture, according to crypto analyst Seth, with bulls hoping for one last capitulation flush before a rally resumes.
Seth outlines two potential scenarios from current levels around $39.5k, which fill the notorious CME futures ‘gap’.
In the first scenario, depicted in yellow, if the $39K support holds, it signals a potential conclusion to the ongoing market correction, prompting market makers to ascend and liquidate short positions.
Contrastingly, the red scenario suggests that the correction may not be complete. Bitcoin might revisit the $39.5K level to fill the CME gap before embarking on an upward trajectory to dismantle short positions.
Either resolution implies that short-term holders face continued volatility. But longer-term investors can tune out the noise, according to Seth:
“Long-term investors should look away. Chill and enjoy life like Saylor is doing.”
Additionally, Seth highlights a decline in open interest to pre-pump levels, indicating a significant shift in market sentiment. The abrupt fall caught many long positions off guard, emphasizing the importance of risk management. The narrative reveals that the recent market turbulence has resulted in substantial losses for those adopting an excessively risky and stop-loss-free strategy.
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Show more +Ranging chop persists, but resolution nears a promising respite eventually. Which path concludes the bottoming pattern should reveal itself soon, highlighting why protective stops matter in times of extremity.
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