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November 4, 2022

After the weekend sell-off, Bitcoin rallies

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Technically, the bitcoin rally ended on Saturday with the breaking of the $422 swing low. We saw first that prices crashed through this level on OKCoin, and other Chinese exchanges. Bitfinex and BTC–E, which are U.S.-dollar exchanges, took a little longer to break the levels but they soon joined the selling. The chart below shows that OKCoin hit a low at $393.22 Saturday afternoon.

On other USD exchanges, we traded at a low of $401.15 for BTC-E and $405.50 for Bitfinex. We saw this pattern of weakness throughout the weekend, with many CNY exchanges quoting USD prices. This is unusual, as China normally trades at a premium. This discount has shifted back to premium in the last few hours, with most CNY Exchanges selling BTC at 2,744 Yuan ($424 US), while USD websites are currently trading at $420.

The close to expiration futures are now trading at a discount to confirm the shift in momentum. The January 1st issue currently quotes $420 dollars. This is approximately $2 less than the Bitcoin Futures Index. The January 8th contract is currently at $420.30. Only one contract is still showing premium, the 2016 issue expiring March 26th. It is currently quoted at $429.57.

What’s next for Bitcoin now that the rally is over? The $400 mark is the first significant support for bitcoin’s descent. This figure is very close to the point where most USD exchanges have stopped selling USD. Further down, we find another support level at $383 on OKCoin and $379 for BTC-E. This would signal a new downtrend in BTC. Further support can be found at the $350 per-cent figure.

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