Two weeks ago, we wrote in our morning piece how thinly traded markets can act in regards to large volume and price moves, like the one roughly 24 hours ago. “The market at present appears to be very illiquid. As a result, prices stay in a tight range for days, only to gap 200–300 points in either direction. That’s exactly what one would expect when an entity needs to either buy or sell any significant volume in a thinly-traded marketplace.” Our Chief Derivatives Strategist, Dr. Ilya Kurland, could not have stated that more precisely. He further wrote, “Our downside target is in the $2400-$2800 range. A short covering rally may easily take BTC to $4030-$4300 cluster of previous highs”.
As you can see from the chart below, BTC SHORTS have certainly lightened up since the rally from the $3,600 level that started roughly 7 days ago.
With the price collapse that occurred over the weekend, you can see from this chart that BTC SHORT INTEREST did NOT increase. One would surmise that this weekend’s price action was initiated from BTC longs liquidating their inventory, with the market not easily absorbing their selling pressure. As we have stated time and time again, we are in a BEAR market, and strength should get sold into.
We can see clearly now that the ~$4,200 BTC level has formed RESISTANCE, and until that level gets broken to the upside, we will remain BEARISH of the crypto space.
Finally, we have a market on MKR Options that we received interest on over the weekend:
MKR M (Expiry 6/28/19) $500 Puts $50/$150
for $500k notional with a reference price of $680
Please contact us if you have interest in MKR Spot or Options.