Bitcoin (BTC) appreciated its weekly volatility dose on Sunday evening, going to $ 107,000, before going decisively to $ 102,000.
The cryptography market generally undergoes a volatility bump at that time on Sunday, because it coincides with the opening of the CME term contract market, which puts a few moments to recalibrate on the cryptographic markets of lower liquidity 24/7.
This weekend was slightly different. While in surface, prices will drop as a lower rejection of a key level of resistance, which Bitcoin failed to break three attempts. BTC actually increased first on the CME, indicating that prices’ action was led by institutional American traders as opposed to commercial crypto traders.
In recent months, the CME has often opened its doors lower than Friday, creating a “gap” on the graph, which did not occur this week. While the price made a boost around this fork of $ 5,000, the move destined the liquidity of both sides, creating a rather crucial inflection point.
Now, the depth of the market up to $ 110,000 is minimal compared to limitation orders which limit the book to $ 100,000. This means that any increase in the rise will probably remove this level and see the Bitcoin trade in a new record.
However, it is worth considering the other side of the medal. It is also conceivable that the action of Sunday evening prices is a hunt for the loss of stop-loss, which implies that traders targeting an area where those who are in the short term would like to go out, thus creating an impulse of purchase pressure while short traders rush to buy their position.
This strategy often takes place alongside the entry into a greater short position. For example, if a merchant wants to short-circuit the BTC with a risk tolerance of 4%, it would be advantageous to open this position at $ 107,000 with a loss of stop at $ 111,280, against $ 105,000 with a stop at $ 109,200. Clever merchants can secure this entry by evaluating liquidity levels and tightening short positions in the closure, which temporarily increases the price to an ideal entry.
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