Bitcoin (BTC) delivered more surprises through Oct. 14 as the reaction to macro triggers saw a flash rally to $20,000.
Stocks, crypto smoke shorts
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising to one-week highs, gaining nearly $2,000 in hours.
After the US Consumer Price Index (CPI) print for September beat expectations, an initial crypto rout put bulls on edge, but the pain was short-lived.
Bitcoin finally broke above its pre-IPC levels, following stocks that were described as the delivery of the “biggest bear trap of 2022”.
“That’s got to be the biggest bear trap I’ve seen yet,” popular Stockrocker Twitter trading account reacted.
“Even I was starting to feel pretty bearish.”
Therefore, Bitcoin maintained volatility and sell-offs as the spot price bounced around a set trading range.
Popular On-Chain College Twitter Analytics Account indicated that the settlements in a single hour in the day were the highest in those terms in more than a month.
Data from monitoring resource Coinglass puts total BTC liquidations at $116 million in the 24 hours to time of writing. Cross-crypto settlements totaled $327 million.
While it failed to recapture the $20,000 mark, Bitcoin managed to shift traders’ perspective to the bullish side.
Analyzing chart behavior dating back to 2019, Credible Crypto plot that the signs were there for an extended bullish breakout.
“Our last two big rallies were preceded by about 120 days of relatively low volatility consolidation before they started,” he summarized.
“It’s supposed to be boring, it’s part of the process. The more boring it gets, the better it is for the next expansion.”
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Therefore, the focus was on whether the markets could maintain the status quo at the end of the week.
Related: Why is the crypto market down today?
In a sign that potential trouble is brewing, the US Dollar Index (DXY) started to recover lost ground on the day in what could still take the momentum out of the rally in risk assets.
Summarizing the situation, popular trader Roman said that while it was worth being “macro bearish”, there was no reason to ignore the signs of what should be a temporary relief rally.
“Yes, I’m a macro bear, but this move down is not,” part of a Twitter thread. read.
“There is a bullish divergence on every time frame higher and DXY has bearish splits. USDT.D also rejected resistance. Tiny brained investors are shorting the bottom once again.”
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