It was November 9th when Bitcoin last made an ATH at $69K. Since then, it dumped to $42K eventually. Now we see in these next three charts from Will Clemente that open interest is building up in Bitcoin! However, are they long positions or short positions. Nothing has been wiped out yet. Leverage is high. Whales will wipe out the open interest in one direction or the other. We have no idea which direction Bitcoin will turn at the moment. The longer it consolidates the more violent the liquidation of either leveraged long positions or leveraged short positions. We just don’t know right now. Fear and greed is low:
Therefore, market sentiment is very negative and a lot of people expect a dump to $42K or even into the $30’s! It could easily go the exact opposite way! Impossible to know right now. Below are the three charts focusing on implied volatility. One month, three month, and six month time frames per chart:
So in each of these charts, the orange, yellow or green line is the implied volatility and the grey line is the BTC price. In each case, one month, three month, and six month implied volatility is dropping like a stone! The longer the index, the lower implied volatility goes! What does this mean. Well, it means as leverage increases and volatility decreases, a big move is likely to happen. When, nobody knows. Which direction, at this time, nobody knows. It’s 50/50. We have to be honest about that. Which is why we led this week with global macro analysis, which was also inconclusive. To us, the fear and greed index of 23 gives us the best market sentiment indicator, which, often leads to a reversal. We are buying the dip today, but only on a hunch and a commitment to Bitcoin as the answer. We have absolutely no guidance on which direction Bitcoin is going right now. Of course we hope it is up! Below is the yearly candle for Bitcoin. 2021 was an up year, but disappointing all the same: