Weekly Recap – 03-05-23
Top 5 by MCAP
Although this recap is mostly about Bitcoin, it’s still important to discuss the overall health of the Top 5, as numbers 2-5 have sway in the altcoin world. The Top-5 is feeling the pressure this week as last week left much to be desired from the Power 5. DOGE, XRP, and BNB are all posting long and short-term strong downtrends, respectively. ETH is pulling back on the shorter timeframes while Bitcoin maintains a weak sideways price action profile.
Bitcoin Monthly - Long-Term
Bitcoin was able to close the month of February in the green! This marks two months in a row, something we haven’t seen on the Bitcoin Monthly chart since last February/March. Unfortunately, the High from last August remains a concern as the February High could not flip that level and turn it into support. Instead, resistance was found, and we wait to see if the bulls have another try left in them.
Bitcoin Weekly - Mid-Term
The Bitcoin Weekly chart is still in favor of the Bulls. This is because the current low is still intact, and therefore the trend still favors more upside. The point at which the Bulls failed was almost precisely the same level as the August high, creating the potential for a Double Top. The most recent lower Structure Break is also the .382 Fib from the low down at $15,460 to the current High. This could mean we actually “sweep the lows” to shake out the weak hands and find support at the same structure break. Breaking that low is an entirely different story, however.
Bitcoin Daily - Short-Term
The Bitcoin Daily chart looks more Bullish than the weekly – mainly because you can see the trend support from the local price action. The third touch on a trendline is generally the confirmation touch. We slipped past the trendline just for a minute but have since recovered, and Bitcoin has put in two candles above the trend for now, with the third one just starting. This is not to say the trendline can’t break, but it has more reasons to stay as support than it does to fail at the moment. As we can see from the chart above, Uptrend #7 is above #5. If we are to lose the higher-low before breaking the #6 higher high, Bitcoin could drop back to the 17’s, based on significant support and retesting the area that Bitcoin blasted through in early January.
Daily Bitcoin Volume
Volume remains a concern for all Traders and Investors. The current downward slope in Volume on the 30-Day average is very aggressive. This shows day after day; Bitcoin trading volume is getting lower and lower. The monthly average is the lowest it’s been in almost a year. The recent rejection is technically understandable, but the Volume should be picking up to show that genuine interest is trading these levels. Unfortunately, this we do not see.
Bitcoin Dominace continues to struggle at 44.5%. This current resistance has held off two attacks so far. If we consider the recent pullback less deep than the previous pullback, then we can consider an ascending triangle as a consolidation pattern under resistance. These patterns tend to break to the high side as each attempt weakens the resistance a little bit more.
Bitcoin CME Futures
The last few weeks have been exciting for the Bitcoin CME Futures chart. Last week we cleared another local gap, as seen by the white box on the chart, and we are currently working to fill this weekend’s gap that was left after the opening earlier today. We are in an exciting area as there are gaps to both the upside and the downside, as seen by the large orange boxes. If Bitcoin is to break the recent low, then the lower gap would be an easy target to fill. If Bitcoin is to maintain the current low and break the recent high, we will be on our way to breaking the large overhead gap. *The newest gap has been filled during the time it took to write this article.
It seems like every week, Bitcoin is at a “critical level.” That’s really not the case at all. Bitcoin is always one of three things:
It’s the sideways chop that constantly plays with everyone’s minds.
From late December/to early January, Bitcoin has been on the rise. For each local high, Bitcoin pullback and gives a higher low. We are now six confirmed steps into this uptrend, and until we break the actual trend, there is no reason to fuss so much about the intraday action. Bitcoin must find support and break over the top of #6 to continue the trend. If Bitcoin is to drop below the recent low, there is a slight chance we will see a shakeout and then more upside. If Bitcoin is to take the lows out, the current trader sentiment will drop to the floor, and we would likely be in for more downside.
The two major drawbacks are the looming Double Top from last August and the declining volume over the previous two months, the same period that Bitcoin has been trending up. Generally speaking – Volume Down and Price Up mean false rallies. Time will tell…
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