This past Thanksgiving, Bitcoin concluded with an intense trading session. It was the first cryptocurrency by market capital to be rejected. The crypto has fallen over 6% since its 24-hour chart and reached $60,000, BTC traded at $54,084 at press time. However, there is a risk that it will fall further.
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The traditional financial market also took a big dive due to the news that a COVID-19 variation in Africa was discovered. This wrack havoc across many sectors with the S&P 500 and DOW Jones recording an almost 3% loss in the past 24 hours.
Bitcoin has a strong correlation to traditional markets in periods of economic development, as 2020 and 2021 show. The trending downward in benchmark crypto is due to investors fearing a global lockdown that could prevent the spreading of the alleged new cryptocurrency.
In the 24 hour chart, the U.S. Dollar (as measured by DXY Index) has seen a loss of 0.71%. Since November 10, the currency had been showing strong strength.ThThe U.S. Federal Reserve suggested that tapering was beginning in a hint but it was rejected by the market at the 97 price mark.
Bitcoin’s weakness in recent weeks has been blamed on the U.S. dollar rally. A rejection at these levels could provide BTC’s price with some relief allowing it to make a more convincing rally into $60,000 and uncharted territory if it’s able to prevent more downside in the short term.
Today’s positive effects of the selloff are:
1. It is eradicating excess leverage/weak hands
2. The $DXYIt is falling back below the channel’s top
— Justin Bennett (@JustinBennettFX) November 26, 2021
The Bitcoin Market is One Step Closer to New Highs
NewsBTC reported this week that the futures and derivatives markets could hold the key to Bitcoin’s bullish momentum. This area was overheated as traders anticipated that BTC will quickly move beyond $70,000 in November.
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Even though Bitcoin was retesting critical support, the funding rates for all exchanges continued to be high. There had also been an increase in selling pressure. Data shared by Byzantine General, a pseudonym analyst, showed that total open interest across the market had not moved in tandem with recent price movements. This suggests there may still be some leverage.
Still little to no lmao.
Markets are now more leveraged. pic.twitter.com/1AVPh9oOR5
— ₿yzantinΞ General (@ByzGeneral) November 26, 2021
At press time funding rates on all exchanges have started to turn negative, but they remain positive in Binance and Bybit. Binance has become more neutral over the last hour. As BTC heads into weekend, more trouble could be ahead.