Margin traders bearish on bitcoin at Bitfinex are becoming emboldened, with the open short interest surpassing the long interest for the first time in almost two months. The dip in BTC-USD, which fell from around $1230 to $1141 since April 11, could be short-lived with the cryptocurrency getting ready to jump to fresh highs if contrarian speculation takes hold.
The daily price action for BTC-USD on the Bitstamp exchange, displayed below, shows that the market may just be squatting before jumping to fresh highs above $1229.00. Bears dominated the price action on April 13, bringing bitcoin to a low of $1141 but the Ichimoku cloud held as a support zone, with buyers pushing the closing price up to $1172.91.
Also, notice that the market respected the support level as indicated by the conversion line (blue), which stood at $1170.00 on April 13. A close of that candlestick in particular below this level would have given the first bearish signal indicating a longer-term downward trend. However, this signal was not obtained, suggesting that the likelihood remains greater for a move to the upside for BTC-USD over the long run.
For April 14 the conversion line, which also indicates short-term equilibrium as opposed to long-term equilibrium signaled by the Ichimoku cloud, has moved higher from $1170.00 to $1181.68, providing another signal the market will trend higher in the coming days. Uptrends are accommodated by a rising conversion line whereas downtrend display a falling conversion line. For instance, notice that since March 31, the conversion line and the price of bitcoin have been rising in tandem.
The Ichimoku cloud projected ahead has also changed color, suggesting a long-term uptrend is forming. The cloud has changed from red to green and we look to buy in the area of the thick red Ichimoku cloud,