Thread by @AllenAu11

#BTC had a 19% correction from its intraday high of $53K to $43K! What happened?

1. Buy the rumor (El Salvador's law on adopting Bitcoin as legal tender came into effect today), sell the news
2. Miners selling
3. Leverage & fervent speculation, especially Alts

Game over? Not!🧵

1/ Buy the rumor & sell the news. True.

2/ Miners have been selling their #BTC reserves since the end of August. They've sold 1507 BTC on a week-to-week basis, but nothing to cause the correction we've seen today. Miners are probably taking some profits on the strength of BTC.

3a/ The real catalyst for the correction is the leverage built up in the futures market, especially in Altcoins. Don't believe me?

Take a look at #ETH futures OI. It rose to a new ATH of $11.62B today!

3b/ The funding rates for #ETH futures longs have been >0.01% lately, rising as high as ~0.2%! There is excessive leverage longs in the market & any good size selling in the spot market will lead to massive liquidations, driving down prices further.

3c/ $837M of #ETH futures longs were liquidated today & this caused ETH to correct as much as 24% at one point.

The correction in ETH & Altcoins spilt over to #BTC...

3d/ The leverage longs built up in the #BTC futures market are not as much as that in ETH futures, but the correction in ETH & Alts triggered selling in spot BTC as well, causing futures longs liquidations even though the funding rates of BTC futures are not high.

3e/ So far, $1.23B #BTC futures longs were liquidated. Driven by the futures longs liquidations, BTC corrected as much as 19% today.

4a/ Remember the bullish MACD cross chart? Like clockwork. Overlaying the 2013 bullish phase fractal on the current price action, #BTC shows a dip this week & it did!

If history plays out, BTC is off to the races soon!

4b/ If we take a look at the CM Super Guppy indicator, #BTC is still firmly in an uptrend.

Based on MACD, CM Super Guppy & moving averages, this correction should be temporary.

4c/ #BTC wicked down below the ascending triangle & dropped below the 20D EMA. Let's see if it could close above the 20D EMA today. That will put it back inside the ascending triangle. We will wait for BTC price action to resume upward to hit the $56K target.

S: $45K/$44K/$41K

4d/ Another way to look at the price action of #BTC is that it's moving inside an ascending parallel channel. It dropped below the bottom of the channel (~$47K) today, but it managed to move back inside it. BTC is still possible to hit $56K ~9/10/21.

S: $44K/$41K/$35K (MLTLC)

5/ Conclusion:
1. Leverage in the crypto futures markets caused the correction today.
2. Short term, #BTC's price needs to stay above $47K to hit $56K target.
3. Support at $45K/$44K/$41K
4. Outlook remains bullish & there is real concern only if price drops below $35K (MLTLC)