“The intelligent investor is a realist who sells to optimists and buys from pessimists.” - Benjamin Graham
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BTC price nosedived to a low of $38.555k on Tuesday prior to a comeback above $40k earlier today. However, the key question revolves around the $40k level, a psychologically significant figure and a major area of interest for market participants.
Caution is advised in establishing large positions due to BTC’s inherent volatility, especially considering the recent sell-off following the announcement of the BTC ETF. The Risk Signal has approached the first time in a while the high risk area, supporting volatility’s argument.
This is very similar to back when we got the first futures markets for Bitcoin that saw BTC not only fall, but it fell 80%. Now, it doesn’t necessarily think that we’re going to drop anything like that, but it does give the vibe of a sell the event type of situation.
If we do break down from here and break down below the hammer from the Tuesday session, then we have to ask questions about the $35k level where we believe the trend is defined at the moment as the 200 day EMA is racing towards that area. BTC’s still bullish, but now that there’s an ETF out there that institutional traders can short, it’s going to change the dynamics of the markets permanently.
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