As Q4 approaches, the total crypto market cap holds near $2.7 trillion despite a Fed rate hike. On-chain data shows leverage at its highest since October 10, with traders like the Machi brothers increasing positions to $131 million. The TD Sequential indicator on Bitcoin’s 4-hour chart has flipped to a sell signal after an 8.5% rebound, while over $100 million in sell orders sit near current price levels. Bitcoin has outperformed the Nasdaq by 42% over three months, and its purchasing power against gold rose 21% in a month. A short-term pullback could reset the market and set the stage for Bitcoin to reclaim $85,000.
High-cap crypto assets have held relatively well despite the Federal Reserve rate hike, keeping the total crypto market cap around $2.7 trillion. On-chain data indicates that pressure for a short-term pullback could be building.
Speculative capital is ramping up, with leverage in the crypto market reaching the highest level since October 10. Traders continue to take leveraged positions, and the Machi brothers increased their position to $131 million.
The TD Sequential indicator on Bitcoin’s 4-hour chart recently issued a buy signal before an 8.5% rebound. It has since flipped to a sell signal, suggesting that short-term bullish momentum may be capped.
More than $100 million in sell orders already exist around the current price range of Bitcoin. This indicates that sellers are ready to exit at these levels, which may limit further gains and create a bull trap.
The macro backdrop for Q4 is volatile, with the Kobeissi letter expecting an “eventful” quarter as a test period for crypto. Factors include rate hikes, midterm elections, oil above $100, and a 10-year yield above 5%, while stocks are near record highs.
Despite the market FUD, crypto has remained resilient, creating a divergence from other asset classes. Analysts believe that a shift of money from U.S. equities into crypto may have begun, with Bitcoin outperforming the Nasdaq by 42% over the past three months.
The Bitcoin-to-gold ratio has climbed to 18.55. A month ago, one Bitcoin could buy about 15.3 ounces of gold; today its purchasing power against gold has risen by roughly 21%.
Bitcoin’s resilience amidst the current market FUD points to a growing divergence between crypto and traditional risk assets. A short-term pullback could flush leveraged positions and reset the market, paving the way for fresh buyers and potentially setting the stage for Bitcoin to reclaim $85,000 and spark a stronger Q4 rally.
