Weekly Recap – 01-29-23
Top 5 by MCAP
It’s a whole new market out there now, and that is evident but the month-long rally we are currently enjoying. January comes to a close in 2 days, and the preliminary data is looking very good for the month. We have yet to eclipse the rally high in the $25K zone, but the move so far in January is undeniable. Will it last or fade is always the question, but that is also why “Disbelief” is one of the pieces to the cycle puzzle.
Bitcoin Monthly - Long-Term
Long-Term Monthly outlook on Bitcoin is still a bit concerning. Overall trend is still up because the last major High was higher than the one before and the last major low was indeed higher than the last but we are so close to either a double bottom or a complete breakdown of previous support. If and when that happens then the Long-Term trend would officially be dead and it would be trying to transition into a downtrend. As of right now, Bitcoin is doing everything it can to maintain action of the previous major low.
Bitcoin Weekly - Mid-Term
Last June, we had a very aggressive sell-off that created a low that would last for months. That drop peaked from High to Low at -44.66%. So far this January, we have had a peak range move from Low to High of 44.27%. These are huge numbers, especially when we are considering the largest-cap Crypto in the world.
The previous three weekly candles closed above $1000 each but are decreasing with each passing week. So too, is the volume associated with each weekly candle. Aggressive moves like this tend to pull back at some point, usually when faced with heavy resistance. The heavy resistance in the near future begins around $29K. Bitcoin is more or less free to roam into that region without too much interference, at least on the weekly chart.
The next test is the resistance between $24,287 – $25,214. This area includes structure from the previous downtrend. The rally so far is proving to be strong and carrying momentum with it. Weekly could test that area and then correct heavy, or it could rip through that area and flip it as support.
Bitcoin Daily - Short-Term
The Daily chart helps us see the consolidation on key levels. Notice the 6-day resistance felt at the first structure break and then notice the 9-day consolidation at the second structure break. This is not a coincidence.
If we are to remain on target, we should see the price accelerate to the following structure break and either get rejected or consolidate for a bit before another clear move, either up or down.
What Bitcoin is doing now, which it hasn’t done in a very long time, is establishing areas of support. These were once resistance areas and can now be considered potential support during times of pullback and profit-taking.
Daily Bitcoin Volume
More and more consecutive days of buying can be seen during January. This helped to reverse the downward trajectory earlier in the month. However, those levels of volume have proven to be unsustainable. With the reduction of volume, we will see a slight decline until the average settles into a more sustainable increase if we are to continue the upward march.
Bitcoin Dominance
Bitcoin Dominance has found its new area of resistance to hang around at for a while. After finally managing to flip 42%, the latest area of resistance – 44.5% – becomes the new home for Dominance. This is a very old level, but you can see how well Dominance responded when it came in contact with it.
Bitcoin CME Futures
The CME Futures chart is getting a bit messy, but that is only to show how often these gaps get created and filled within a short period. The Gap that all of this price action is headed toward is the gap created by the sell-off last June. That upper gap level sits at $28,920. There are still more gaps than that above, and as we already know, we have plenty of gaps below.
Conclusion
The next Structure break sits near $25,200. $25K is a psychological level, and when dealing with an asset near $25K, +/- a few hundred is not exactly a dealbreaker. No one can debate the strength of this move but what is being discussed is whether it has staying power or not.
Bias can destroy traders. Formulating strategies that can help traders make trading decisions regardless of what Twitter says is far easier and more reliable. Some strategies that follow trends will likely be trading Bitcoin as the trend is proving to be intact and strong. With every break of the previous structure, it only gets stronger.
Some traders will find themselves in a state of disbelief. They will short every pump and lose every trade. This is because they are now conditioned to be a perma-bear. This is not the way to trade effectively. Let go of your Bias and trade the chart. Up or down, trade the probabilities of the next direction.
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