BTC and ETH Rallies to Confirm Double-Bottom Pattern, Those Sitting in Stablecoins to Take Them Higher

Now that Alameda Research, Tesla CEO Elon Musk, Bitcoin shorts, and speculation over Amazon’s potential involvement in the cryptocurrency sector have done their part. $40k is the point of interest which is the largest OI for the upcoming BTC options expiry this Friday.

In a strong upwards move, Bitcoin has bounced off of $29,350 low last week to $39,800 on Coinbase in the late hours of Sunday or early on Monday.

Up 11% in the past 24 hours and over 21% in the past week, the price of Bitcoin has now reached a level not seen in nearly six weeks.

While Bitcoin has breached the key level of $35,000, Ether also rallied to more than 7% to almost $2,400, a level last seen earlier this month. In the past week, ETH has soared nearly 24%.

With this move, both Bitcoin and Ethereum have confirmed a classic double-bottom pattern. This pattern signals the reversal and the beginning of a potential uptrend.

This uptrend that pushed BTC above the crucial technical level for the first time since early May came in the aftermath of Tesla CEO Elon Musk’s conference with Ark Investment Management LLC’s Cathie Wood and Twitter CEO Jack Dorsey, where he revealed that he himself owns BTC, ETH, and DOGE and his other company SpaceX is also a long term holder of the leading cryptocurrency. And, of course, he only pumps and never dumps.

Interestingly, FTX CEO Sam Bankman-Fried’s quant trading firm Alameda Research put a bottom last week.

Alameda is “buying a LOT more over the past day or so,” shared Sam Trabucco, a trader at Alameda. “We’re continuing to buy down here, because it really just seems like too much points that way.”

From here, those sitting on the sidelines in the safety of the stablecoins are expected to drive the market further. Stablecoin supply on crypto exchanges also remains high.

For BTC, $40k is expected to be the level where taking it out convincingly will mean, “we are heading towards $50K quite quickly as there is a lot of crypto native capital that is still sitting on the sidelines,” according to SpartanBlack of crypto fund The Spartan Group. “If we break this level, the bull market is back, and a ton of capital will pile in.”

$40k is also the largest open interest for the upcoming bitcoin options expiry this Friday, as per Skew.

The short squeeze also drove this rally as 103,889 traders got liquidated for $1.14 billion in the past 24 hours. With Binance no more showing complete liquidations, it is expected to be a much bigger figure.

Total open interest on Bitcoin futures also dropped by more than 50k BTC — currently at 349.7k BTC from over 400k BTC less than a week back.

Interestingly, after a brief jump in funding rate, the highest is currently on FTX at 0.0168% and still negative on the majority of the exchanges. On Sunday, the funding rate on FTX and Deribit also decoupled from the rest of the market by being positive.

Trader CL of eGirl Capital meanwhile noted that almost every FTX altcoin September futures have been in multi-week/month backwardation. These fixed interest rate markets are of importance as they are an approx. Summary of OTC desk rates for borrow, he added.

Additionally, “bybit traders have been selling their spot coins, into USDT, and migrating to USDT futures,” which means these traders that dumped all their coins would have to buy back to take part in this rally, stated CL.

Some also attributed this rally to ongoing speculation over Amazon.com’s potential involvement in the crypto sector.

The tech giant is not only hiring for a cryptocurrency and blockchain lead but also looking to accept Bitcoin payments “by the end of the year” with its very own native token to make payments and earn loyalties in on the cards for 2022 reported a media publication citing an insider.

“This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future – this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work,” an Insider told City AM.

“It begins with Bitcoin – this is the key first stage of this crypto project, and the directive is coming from the very top… Jeff Bezos himself.” The plan, which has been ongoing since 2019, apparently also involves moving to other big cryptocurrencies like Ethereum, Cardano, and Bitcoin Cash once a fast and secure method of Bitcoin payment is established.

“This entire project is pretty much ready to roll,” they added.

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Author: AnTy

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