Stuck Between Support and Resistance
Bitcoin Dominance on the Move
I know we just spoke about Dominance before but we are reaching a make or break point for Bitcoin and it’s worth making sure everyone is aware. Last we spoke about Dominance, we laid out some local Support levels coupled with a Resistance trendline from long ago. As you will see in the picture below, the local Support has held and we are knocking on the door of Resistance once again.
If Bitcoin Dominance is to break out to the high side then we need to be aware of the next potential resistance area. That looks to be right at 50%. Already a technical level based on the action but 50% is a Psychological level as well.
The Bigger Problem with Dominance is that the broader market usually dies. We can see an Alt Market Crash as Bitcoin soars to potentially new highs. Damage on Alts can be massive -think 50-95% drops.
What's Driving the Surge?
Nonother than our old friend – BITCOIN ETF. The Bitcoin ETF party is alive and well in the SEC, on Twitter and all over Discords and other Public and Private Socials. Bloomberg, CNBC, Markets Insider… They are all talking about it.
Now I know we have discussed Media Manipulation before but in this market, Good News is rarely a Good Thing. All these whales going on and on about how great the Bitcoin ETF is are the same whales who told you Bitcoin was worthless and then quietly bought Hundreds of Millions of Dollars worth after they personally tanked the Market.
When we get really good news – over and over again – that is a fairly good sign that these whales are ready to sell. Just look at what happened when the CBOE first launched the CME Bitcoin Futures product.
Bitcoin Futures opened December 18th, 2017 – The DAY AFTER THE BITCOIN ATH.
Immediately after Futures opened, Bitcoin dropped a peak low of 43% in 5 Days.
In only 50 days – Bitcoin dropped 70% – adding to its Bloodbath.
The total move, however, was an 85% Drop.
From the Open of Futures at $20,650 – inside of a full year of trading, the Bitcoin Futures chart dropped 84.89% which was a loss of $17,530 per Bitcoin and left the asset at a CME Low of $3120.
It took Bitcoin 1094 Days to fully recover from the loss after the Futures trading opened on December 18, 2017.
Not until December 16th, 2020 – 2 days shy of a full three years did Bitcoin CME Futures finally trade ABOVE it’s opening price for the very first time.
This is the stuff we need to be very aware of and very careful of.