Those betting on further falls are seeing pullbacks as Bitcoin starts the Wall Street trading week with a higher surge.
Bitcoin (BTC) regained lost ground when Wall Street opened on August 29 amid talk of an imminent short squeeze.
BTC/USD hourly chart (Bitstamp). Source: Trading View
Shorts Lose Due to Moderate Upward Pressure on BTC
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD surged to nearly $20,400 on Bitstamp as U.S. equities began trading.
The move was a welcome relief for Hodler, who watched the pair gradually fall below $20,000 over the weekend.
Now that the market was “aggressively short”, conditions seemed to favor another rally to burn out those dormant short trades.
“You know what’s coming next,” the popular cryptocurrency Twitter account Il Capo warned, reaffirming his belief that a deeper pullback would follow the rally.
Meanwhile, data from the network monitoring resource Coinglass showed that the number of liquidations began to rise at the time of writing, with the total amount of cross-crypto liquidations amounting to $166 million in 24 hours.
US stocks themselves opened slightly lower, while the US dollar index (DXY), which hit a new 20-year high earlier, has begun to rebalance its peak from a previous correction.
“$DXY could approach its macro high, similar to Bitcoin, in April 2021,” concluded trader Jackis.
“Many of the bearish divergences seen on the daily chart are certainly noteworthy. The moment of DXY growth is the moment when the main assets show the macroeconomic bottom.”
US dollar index (DXY) 1-hour candlestick chart. Source: Trading View
On the downside, analyst sentiment remained bleak given the ongoing macroeconomic turmoil.
Related: US dollar hits new 20-year high – 5 things to know about bitcoin this week
After the US Federal Reserve’s comments last week that dashed any hope of a policy change, equity markets have had little cause for optimism as quantitative tightening looks set to continue.
“It’s hard to get too excited about $BTC and big pumps when SPX looks like this,” concluded trader and analyst Josh Rager.
“There will be exceptional assets that perform better and still perform in this bearish environment. But in general, apart from these tokens, it is difficult to influence the downtrend of stocks much.”
Meanwhile, altcoins have shown mixed progress as bitcoin surged and ether (ETH) led the top 10 cryptocurrencies by market cap.
ETH/USD is up about 6% at the time of writing and has broken the $1,500 level.
Hourly candlestick chart ETH/USD (Binance). Source: Trading View
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