Bitcoin briefly dipped below $9,000 after bulls couldn’t hold the support level but were buying the dip indicating that bears do not currently have much vigor. This isn’t the first time Bitcoin has slid below $9,000 and revive in the same day. This theme has been going on for the past two months and works in the same manner on the upside above $10,000.
In the last few weeks, Bitcoin has been following the steps of the global stock market. There are many long positions currently opened on both Bitfinex and BitMEX, in fact, most of the top coins have many more long positions than short positions, close to 95% dominance in some cases.
Additionally, Bitcoin exchange balances continue to drop which also indicates investors are more willing to hold the digital asset. Unfortunately, that doesn’t mean we can’t see sell-offs. Moreover, a big enough sell-off could trigger the liquidation of long positions creating what’s known as a long squeeze pushing the price further down.
Josh Rager reflects on how Bitcoin is looking to take out some of the high leveraged positions currently open. He believes Bitcoin needs to hold $9,100 to remain strong despite the recent sell-off.
Bitcoin and The Global Stock Market
The recent sell-off seems to be closely related to the Dow Jones which also fell from 26,200 to 25,851 in the same time frame. The S&P 500, however, has remained quite stable. If we look at the price movement of Bitcoin in the past week, we can clearly see that it has been mimicking the global stock market for the most part.
This correlation was also present after the massive crash on March 12 but eventually was broken weeks later. Bitcoin could break the correlation again unless the stock market experiences another crash due to renewed COVID fears.
