Summary
Bitcoin rebounded sharply as risk appetite returned on Monday, as we continue to see a lot of correlation between institutional movements and BTC on “risk on” days.
Bitcoin
The Bitcoin markets have come roaring back during the Monday session, gaining over 3% as I record this video. There is a lot to unpack in this market right now, which, of course, suggests that perhaps we are trying to do everything we can to break above the psychologically important $95,000 level. The medium-term trend is a little bit bearish still, but at this point in time, we are starting to make a bit of a fight to the upside.
Right now, I suspect that if we can clear the $95,000 level, the next level you're going to be paying the most attention to is somewhere in the neighborhood of around $107,000. This is a market that has seen a massive sell-off recently, and as a result, I think you have to be cautious about your optimism, but I am optimistic. I've seen this thing turn around quite nicely.
Risk Appetite, Sentiment, and Institutional Influence
If we continue to see more of a risk-on type of market out there when it comes to indices such as the S&P 500, the Nasdaq 100, etc., that should have institutional money looking for bigger gains going into Bitcoin. The 30% correction was pretty vicious, and the sentiment was absolutely horrible. But at this point in time, the sentiment had gotten to such a point that one had to start thinking maybe we're getting closer to the bottom.
As traders are starting to come back to work for real this week, you can see that clearly, there's an interest in owning this asset still. With that, I think it has more of a buy-on-the-dip feel here, and I do think eventually we will probably correct and go back to the upside. Whether or not we can break out right now remains to be seen.
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But it looks like the $84,000 level has offered a very significant floor in this market. And to be honest with you, I haven't been very bullish on Bitcoin for some time, but this session on Monday could be the beginning of something rather special. And therefore, you need to be paying attention here.
Some of the potential reasoning could be that there were some anxieties out there about it being a cycle top with the four-year cycle in October. The reality is that now that it's institutionally held, that four-year cycle is probably dead in the water. It probably doesn't really exist anymore. There were institutional outflows that really put a lot of negative sentiment in this market, and with ETFs selling Bitcoin, spot Bitcoin, it really put a lot of pressure on this market.
That being said, this is going to behave more like a Wall Street asset, whether you want it to or not. And right now, I'd say the biggest driver is just simple risk appetite. It looks good, but we've got some work to do here at $95,000.
Potential signal: I am a buyer of BTC on a DAILY CLOSE above $95,000. I would have a stop at $92,000 and a target of $105,500.
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