For those out of the loop, Cointelegraph, one of the major crypto news providers, tweeted on Monday that Blackrock’s spot ETF application had been approved, sparking a rapid surge in Bitcoin’s price toward ~$30k. However, this news turned out to be false within minutes, leading the market to give back much of its gains and fueling some conspiracy speculation. This led Cointelegraph to publish detailed clarification with the timeline of events that resulted in ~$137 million in Bitcoin being liquidated in barely an hour.

As Technical Roundup authors noted, it is tempting to label this move as a ‘scam pump’ and expect the market to retrace fully, given that the surge was based on fake news.

The magnitude of the market swing was primarily due to an aggressive buying activity amidst a lack of sell-side liquidity. Simply put, market buying with a shortage of sellers led to a price surge.

From the ‘technical’ perspective, maybe the best approach with this type of market move is to wait and see which price levels can hold on to before drawing any conclusions.

According to Technical Roundup’s latest report (PDF), if this spike was pure fraud, the market should have no problem dropping back below the daily $28,100 level.

On the other hand, some argue that if fake news can cause such a sharp spike, then real news can drive the market even higher.

Also, BlackRock CEO Larry Fink commented in an interview on Fox Business:

“Some of this rally is way beyond the rumor. … I think there are more people running into a flight to quality, whether that is in Treasuries, gold, or crypto, depending on how you think of it.”

And indeed, on-chain analytics firm Santiment reported a huge spike in whales’ BTC accumulation:

But instead of getting caught up with speculation, why not just let the market itself guide your view?

(Source)

Whether it is pure fake news or not, analysts say, the $28,100 seems to be a good pivot level for the medium-term market direction. If the market stays above that level, one can reasonably expect further gains. If it falls below $28,100 on a daily closing basis, and especially below $27,600 on a weekly close, then one might consider this surge unsustainable and expect prices to go deeper down.

How Not To Suck At Trading

Tactical trading is hard. Risk management and position sizing are key. Without proper risk management and position sizing, you will suck at trading on a distance.

MetaTalks disclaims responsibility for any investment advice that may be contained in this article. All judgments expressed are solely the personal opinions of the author and the respondents. Any actions related to investing and trading in crypto markets involve the risk of losing funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.