Bitcoin concluded that last Thanksgiving night with a bloody trading session. The first crypto by market cap was rejected because it hit $ 60,000 and fell more than 6% on the 24-hour chart. At the time of going to press, BTC is trading at $ 54,084 but appears to be in danger of a further decline.
Related reading | New COVID FUD variant cuts bitcoin to $ 54,000
Besides Bitcoin, the traditional financial market has taken a deep dive into the news of a variant of COVID-19 recently discovered in Africa. This has wreaked havoc across many sectors, with the S&P 500 and DOW Jones registering a loss of almost 3% in the past 24 hours.
As 2020 and 2021 have shown, Bitcoin shows a strong correlation with traditional markets during periods of macroeconomic development. So, one of the reasons the benchmark crypto has trended downward is because investors might fear a new phase of foreclosure across the globe to prevent the spread of the alleged new variant.
The US dollar as measured by the DXY index also plunged with a loss of 0.71% on the 24-hour chart. The currency has shown significant strength since November 10e, when the US Federal Reserve hinted at the start of tapering but was rejected at the 97 price mark.
The rally in the US dollar has been attributed to one of the reasons Bitcoin has shown weakness over the past week. A rejection at these levels could bring some relief to the price of BTC, allowing it to achieve a more convincing rally on $ 60,000 and uncharted territory if it is able to prevent further decline in the near term.
The positive points of today’s sale:
1. This eliminates weak hands / excess leverage
2. The $ DXY falls under the top of its canal
– Justin Bennett (@JustinBennettFX) November 26, 2021
Bitcoin one step closer to new heights?
As NewsBTC reported during this week, the key for Bitcoin to regain its bullish momentum could be found in the derivatives and futures market. This sector was overheated in November, with traders expecting BTC to quickly break above $ 70,000.
Related reading | Whales fill up with Bitcoin as market panics
Funding rates between exchanges, even as Bitcoin continued to re-test critical support and saw increased selling pressure, were high. Additionally, data shared by the analyst by the pseudonym Byzantine General suggests that total open interest in the market has barely budged, with the recent price decline suggesting that there is still some leverage to be cleared from the market.
Still barely flinched lmao.
And the market is now relatively more indebted. pic.twitter.com/1AVPh9oOR5
– General ₿yzantinΞ (@ByzGeneral) November 26, 2021
As of going to press, funding rates between exchanges are finally starting to turn negative but remain positive in two major exchanges: Bybit and Binance, the latter of which has turned more neutral in the past hour. Still, a bit more pain could come as BTC heads into the weekend.