Weekly Recap – 01-22-23

Top 5 by MCAP

The market is heating up for the first time since last January… The H4 upward trends are strong for every coin, all the way down to the Top 25. That is impressive and something we haven’t seen in a long time. Bitcoin made a significant move the other day that changed the game and the outlook for all of the crypto for at least the short term. We will get into all of that and more below.

 

Bitcoin Monthly - Long-Term

A few days ago, Bitcoin broke the September high, thus creating a situation in which we have a new 5-month high. This is important as we zoom out and look at the bigger picture. The three rallies since the ATH at $69K have been concentrated into 3-month chunks. Technically, we can now say we are in another 3-month chunk, but the rally would be over this month if we did. However, the relative low to this current move was back in November. The most crucial thing Bitcoin has done is slow down the downtrend and break the most recent significant lower high. This opens the door to a change in momentum and a potential rally.

 

Bitcoin Weekly - Mid-Term

The Weekly move all the bulls needed to see just closed its Weekly candle above the local structure break. Coming off the heels of a $3700 Weekly candle, we closed another bullish candle last week. This one comes in at $1800 but significantly broke the current lower high structure level. This move clears the way for the following structure to break around $25,200. The recent Weekly adds some much-needed confidence for bulls on the fence. There is always a chance of a Bull Trap or a Fakeout, but the recent moves help solidify a local weekly upward trend. 

 

Bitcoin Daily - Short-Term

Ladies and Gentlemen, we have a trend! This one is UP. Lower-High #5 and #3 have been broken, effectively invalidating the local downtrend. This is a massive move for the bulls and a huge wake-up call to those idle wallets. There is no telling whether this will last for a while or it’s nothing more than short-term relief, but regardless, it’s a bonified uptrend and carries momentum. 

The next big structure break comes near $25,200, and we may see some volatility once the traditional markets open in a few hours. We are facing resistance just as we did six days at the previous structure break. Currently, we are on four days of resistance at the current Structure Break level. Don’t be surprised if we see another big-time $1500 daily candle blast through this level.

Daily Bitcoin Volume

Day-to-day volume is breaking the average, and the last three weeks have made a shift in the slope of the 30-day average. Volume is trending up, and the price is currently trending up. This is a general sign of a healthy market and potential continuation. When the price increases, yet the buying increases in tandem, that tells you that buyers are eager to buy, even when the price shoots up. This is also a sign of early FOMO, and one must take care not to get caught in the emotional rollercoaster.

Bitcoin Dominance

Everyone’s favorite chart. The Bitcoin Dominance chart. After finally positioning itself above 42%, Bitcoin worked its way up to the next level of resistance. Just before hitting the 44.5% area, Dominance pulled back slightly. The local trend is with a rising Dominance at this point, and 44.5% is the next target level. This shows that money either coming into the market or money that has been idle for some time is being shifted away from Alts and into Bitcoin. This can also show that the overall price of Bitcoin has risen enough to trump the rest of the market regarding Market Cap.

Bitcoin CME Futures

Bitcoin Daily CME Gap chart has been very active as of late. Smaller gaps have been filled quickly day to day, but we are still left with the more significant $19,550 gap below. This is not too concerning at the moment, but it certainly adds a bit of hesitation to the upside. It is not uncommon for Bitcoin to have a massive wick up or down in a 24-hour period that will not only fill gaps but will target massive liquidations on either side. Bitcoin is currently not high enough to think that won’t happen. The newest lower gap from today’s open looks like it may get filled later today if we see another price rise.

Conclusion

What you see here is a theory, one that was born from the 2019 rally. The Daily 200 EMA has an extraordinary purpose for Bitcoin traders and investors. The Daily 50 EMA also has some unique characteristics. When the 50 EMA crosses above the 200 EMA, that is widely considered Bullish and long-term investors feel safer about taking entries. However, before the 50 crossing over the 200 EMA, the Price typically goes first. 

When this was observed coming out of the 2018 Bear Market, a little dance happened with the 200 EMA, and then Price was gone, like a rocket ship, not to come back to those levels until the Black Swan event of March 2020. The rally of 2019 was indeed a failed rally as it never made a new high. Instead, it retraced about 61.8% from the $20K high to the $3120 low. 

That is the red line you see in this theory. If we are to see similar action, as we did in 2019, then we can look to the Fibonacci 618 for guidance in price targets. This level is around $48,500. This level has confluence with the overall chart as it was the top of the failed rally from last January – March. If this is to play out, we expect rejection near the 618 and another slow-bleeding Bear Market to take place until we breach the trendline from $69K and the 618 potential Swing-Fail high.

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