Bitcoin’s Bumpy Ride: A Comedy of Errors in the Crypto Circus

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Well now, it seems our dear friend Bitcoin has taken a little hopscotch across the financial landscape, but hold your horses! Those analysts are shaking their heads, warning us that this little jig might just be a mirage, hiding a thirst for demand that’s about as weak as a kitten’s mewl.

After a week that could make a rollercoaster envious, Bitcoin has managed to put on a brave face and regain some ground. But lo and behold, the market seers are peering through their crystal balls with a wary eye. It appears this little uptick is not so much a grand revival as it is a few traders scrambling to close their short positions before the ship sinks further.

Indeed, it’s a curious thing when the price rises not due to new buyers jumping on the bandwagon but rather because sellers have decided to pack up their tents. The technical signals are waving red flags like a bull in a china shop, suggesting that selling pressure is still lurking around, waiting for its moment to pounce.

Bitcoin’s Rally: A House of Cards Under the Weight of Open Interest, Warns Ted Pillows

Cyril Pillows-excuse me, I mean Ted-has chimed in on this ruckus, claiming that our beloved Bitcoin’s recent price boost is mostly the result of shorts being forced to close their umbrellas in the rain. Traders are bailing out of their bearish positions like rats fleeing a sinking ship, causing a temporary surge that could leave even the most optimistic among us feeling a tad dizzy.

This little pump was mostly driven by shorts closing.

Open Interest? Wiped out clean, my friends! Now it’s a game of spot demand to decide whether we’re heading for the stars or back to the basement.

As it stands, sellers seem to have the upper hand, which is about as comforting as a porcupine in a balloon factory.

– Ted (@TedPillows)

As Bitcoin recovers like a cat after a hard fall, open interest drops faster than a lead balloon. Many of those leveraged futures positions have been shut tighter than a clam, indicating that traders are making a graceful exit rather than confidently strutting into the fray.

Pillows posted a delightful chart showing that despite a bit of a bounce, Bitcoin is sending out more weak signals than a confused lighthouse. The trend appears to be on a downward spiral, characterized by lower highs and even lower lows-like a sad song sung by a lonesome cowboy.

With open interest plummeting during a price increase, it suggests that the new long exposure is as scarce as hen’s teeth. The sellers are still calling the shots, and unless some brave buyers step in like knights in shining armor, we might be in for a continued descent.

Pillows Predicts BTC‘s Bottom May Be Near $34,500

Now, Ted, ever the astute observer, took a gander at Bitcoin’s standing using his trusty on-chain valuation model, honing in on something called the Long-Term Holder Realized Price. It’s like checking the average cost for folks who’ve been in the game long enough to know a thing or two.

He wisely pointed out that “every Bitcoin cycle bottom has happened 15% below its Long-Term Holder Realized Price. Currently, it’s lounging around $40,300. So, if we take a dip of 15%, we might find Bitcoin’s bottom somewhere near $34,500.”

But hold your horses, he cautioned; this drop may not happen in this cycle. With stronger holder conviction and a shifting market structure, prices could stay above the previously feared depths.

Image Source: X Ted Pillows

In days of yore, the price dipped below LTH costs before finding its footing again, often followed by a wave of selling frenzy and subsequent stabilization that could warm the cockles of any trader’s heart.

At the time of penning this missive, BTC is twirling around $69,447, having made a valiant leap from below $60,000. Yet, even with this recent bounce, the market structure hints at a lack of solid footing. The short-term moves are dancing to the tune of futures activity rather than a hearty accumulation of spot trades.

Ash Crypto Sees Bitcoin Reflecting June 2022’s Weakness

Another sage of the market, Ash Crypto, has drawn comparisons between current conditions and those dark days of June 2022, based on structure and momentum. The weekly Relative Strength Index readings have plummeted to levels reminiscent of prior capitulation phases-usually a sign of panic selling or a temporary bottom.

This week’s crash echoes June 2022.

– RSI hitting the same level-Similar breakdown below key Fibonacci level-Rumors of big HK funds blowing up.

If my hunch is correct, we’re heading into a sideways/accumulation phase ($60K-$90K) that could stretch on for 3-5 months.

– Ash Crypto (@AshCrypto)

Our astute commentator observed a break below a vital Fibonacci support level, harkening back to the crypto winter of 2022. And wouldn’t you know it, that breakdown led to an avalanche of losses as traders reacted in sheer horror to the failed support.

Macroeconomic worries, such as the recent underwhelming performance of Hong Kong-based investment vehicles, have added their weight to the price trend. Just like in those bygone days, fears tied to external risk events are casting a long shadow over sentiment.

Ash Crypto has foretold a prolonged consolidation phase for our old pal Bitcoin, given the current market signals. He anticipates prices meandering between $60,000 and $90,000 for several months, with swift rebounds taking a backseat to sharp swings and lower volatility. Meanwhile, long-term investors will be tiptoeing in cautiously, like mice at a cheese buffet.

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2026-02-08 13:31