Forex Analysis & Reviews: 27.10.2021 - The market is simply taking...

27.10.2021 11:17 PM

The market is simply taking profits; New milestone - Direxion Foundation launches bitcoin shorts

Bitcoin fell to its lowest level in 1-1/2 weeks on Wednesday, losing up to 12% from recent gains - although the digital currency is still on its way to its annual highs thanks to the new opportunity to short positions on BTC

The market is simply taking profits; New milestone - Direxion Foundation launches bitcoin shorts. The digital token has lost 12.1% since hitting an all-time high on October 20 at $67,016.

Bitcoin had fallen 2.3% to $58,965. Smaller coins such as Ethereum and Ripple, which tend to move in tandem with bitcoin, also fell by 3.5-7%.

According to Tony Sycamore, a representative of City Index, bitcoin's losses were due to the fact that traders profited from its recent growth.

Indeed, the moment of fixation was bound to happen. Now we are dealing with a new level of support.

Let's also not forget that a small outflow occurred in the Shiba Inu trade sector, which shows a 100% increase over the past week. This is a normal short-term redistribution of assets between tokens.

The quotes of cryptocurrencies were also affected by disappointing news for the holders of Robinhood shares: an ill-conceived policy regarding the IPO hit the platform, causing indirect damage to all its instruments as well.

Now, when users of the platform are tearing and tearing, wanting to trade Shiba, the service refuses to add a new token, arguing this is dangerous volatility. In fact, things seem to be going badly for the service, and they are afraid of not being able to cope with the liquidity of transactions at the time of the course correction.

Bitcoin is facing a "short-term downtrend," said Du Jun, co-founder of major crypto exchange operator Huobi Group, adding that further decline may be limited given the relatively low trading volumes. The fact is that the holders of the figure are now in no hurry to part with the asset, expecting naturally further growth against the background of positive news.

This month, the digital currency showed an increase of almost 35%, which, while maintaining the dynamics, will be the best indicator in eight months. And it has every chance of it.

Short positions on bitcoin - a new height has been taken

Today, the exchange-traded fund Direxion Bitcoin Strategy Bear announced that bitcoin has overcome another major historical "support level". The bitcoin-related ETF industry in the US could reach another milestone by offering cryptocurrency futures shorts.

According to a statement from the Securities and Exchange Commission on Tuesday, the Direxion exchange-traded fund offers short positions on CME bitcoin futures contracts. Against the background of the debuts of the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF, both of which are backed by futures, this news was not so loud, but created prerequisites for the support of the exchange rate. As soon as retail traders react to the news at the US session, we can expect the token to grow.

It should be noted that the Direxion fund is taking quite serious risks, including the possibility of destroying short sales. The habitually wild fluctuations of bitcoin will also be an independent problem. Other possible dangers include liquidity and futures issues, the filing says.

But in reality, volatility is now playing into the hands of a market hungry for short trades. Moreover, short positions can add liquidity to the entire market. This type of transactions is extremely interesting to players in the cryptocurrency market, because the fluctuations of tokens can be very significant, and here the trader has a better chance that the short will bring profit. Therefore, such news can really strengthen BTC.

"If you are not prepared for significant and unexpected changes in value and the likelihood that you may lose all your investments, you should not invest," the Commission said in a statement. But most likely, new options and the ability to hedge losses will make bitcoin even more attractive.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.