High volatility on Bitcoin

On this Wednesday, August 10, 2022, bitcoin is experiencing strong volatility movements. Various news are at the origin of which the inflation which always plays a strong role in a difficult macroeconomic context. Despite everything, Bitcoin takes almost 4% today and ETH more than 8%. The bulltrap scenario is gradually fading and some investors say they are more confident. Let’s start right away with this week’s bitcoin 360 point. I will try to be as complete as possible in sharing my feelings about the market. Good reading !

A downward trend

Bitcoin remains strongly bearish despite a rebound in July. Ideally, a return to an area between $26,000 and $30,000 could be a good point to take profits. For the most aggressive, a short can even be tried as the risk-gain ratio is excellent.

Altcoins have even higher volatility, which on bullish days like this offer great opportunities to trade them.

CPI down

All markets opened higher on Wednesday after inflation figures were much lower than expected.

The CPI (Consumer Price Index) for July remained stable for the month, rising from 9.1% to 8.5% on an annual basis. The latter rose by 0.3%, less than expected, and fell to 5.9% year on year. It consists of a panel representing the relative weight of each product required by the consumer.

Earnings were immediate, with the Nasdaq up 2.4%, the S&P 500 (SP500) up 1.7% and the Dow (DJI) up 1.4%.

The rise in equities was accompanied by a drop in interest rates. The 10-year Treasury yield is down 5 basis points to 2.74%. The 2-year yield fell 15 basis points to 3.13%.

“The time has come and we have a S&P 500 bottom right next to YOY CPI peak, Fed Policy peak and consumer pain peak via gasoline over $5 a gallon,” the manager tweeted. of Steve Deppe Heritage. “The inflation story is probably over, the disinflation story is on the bridge, and the deflation story is in the hole. »

According to Bespoke Investment Group, this is only the fourth time since 1960 that the monthly inflation rate has fallen by a percentage point or more.

An ever-increasing open interest

The leverage ratio of Bitcoin futures open interest continues to climb. Open interest is data published daily by the stock exchange. It can contain a lot of information about a trend that is emerging or weakening. Open interest is the total number of unexpired contracts at the end of the trading day.

A strong OI (Open Interest) indicates that the open interest is large relative to the size of the Bitcoin market, which increases the risk of a long or short squeeze. Many contracts are open, especially long. Thus, in the event of a decline, the protective stop losses could jump and thus accentuate an even greater decline. It can also happen the other way around. So be prepared for volatility that could continue in the days to come.

That’s it for today’s article. I tried to cover as many points as possible and focus more on the traditional market that guides cryptos. Talking about altcoins here makes much less sense than a macro analysis for me.

Finally, I receive multiple questions asking me on which site I analyze my values. Personally, and for many years, I have been using TradingView, an intuitive interface with a lot of tools and a wide choice of assets. It is clearly the most developed and used interface on the market.

This is the end of this analysis, do not hesitate to give me feedback on my Twitter account @0xakina. Don’t be too greedy, take profits regularly, have a good money management for your trades and rely on your initial plan. Only invest what you can afford to lose as long as it doesn’t affect your morale too much. Have a good week everyone, and I’ll see you next week for a new analysis!

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