Weekly Recap – 05-07-23
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. Each passing week without a significant move adds more frustration and worry to mid and long-term investors. That said, the Top-3 tokens, BTC, ETH, and BNB, all show green from the H6 to the Daily, but they all show a weaker of the two greens. Let’s dive in and see what’s going on.
Bitcoin Monthly - Long-Term
Long-Term Monthly makes the last seven weeks look like a grain of sand compared to the beach. Bitcoin has achieved the upward trend that most were looking for and has exceeded the levels needed for continuation. At the moment, we continue to see the choppy sideways action, whether we look at the Weekly or the Daily. Be that as it may, the long-term outlook still looks good for a rally yielding further upside.
Bitcoin Weekly - Mid-Term
We continue trading above 236 for the ninth week in a row. As you can see from the two highlighted areas, we expect to see some consolidation, whipsaws, and chopping. We spent five weeks in that area as a “pause” during an apocalyptic-style sell-off. Now we opened our ninth week on the low side of that area from back precisely a year ago. The overall outlook remains the same. $28K remains support with $24K as the major retest area and $36K as the next major target level to the high side.
Bitcoin Daily - Short-Term
The Daily is where things get a bit more interesting. As we study the price action, we can see a mini downtrend forming, which could take further shape if we sweep the recent structure low at $26,965. That being said, the overall, more significant trend is still in play, but it forces traders to stay cautious. The recent low that we saw tonight found support on the 236, but as we know, this 236 has been abused many times before and makes itself out to be more of a zone than a precise location on the map.
The potential symmetrical triangle also finds itself a bit out of place as it cannot be drawn with any legitimacy from the local top, making it in-line symmetrical instead of a trend reversal or continuation symmetrical. Either way, today’s candle has breached the lower support angle. If this were to play out, the measured move would land Bitcoin at $25,200 inside the Retest Zone.
Daily Bitcoin Volume
Bitcoin Volume remains disappointing as the volume trend for the 30-Day metric continues to flatten instead of curling upward. The last peak we saw was the third in a series of peaks that all failed to yield a higher trading day than any other day in 2023. We are now five months in for 2023, and the yearly peak is embarrassing, considering the peaks from the previous two years. Altho, for a market that has been down for well over a year, the lack of volume is not all that surprising.
Bitcoin Dominance continues to flirt at just under 49%. This consolidation has been seen many times before. The initial pullback and the following swing-fail are the breadcrumbs we need to say the next rally will also likely fail. If that is to happen, we will probably see another test of the previous support area before a third and final push into the 50% zone. That being said, the trendline could lend effort in support, and being that we have already seen a bounce on the trend, we could be seeing 50% before we see any further drop into previous support. What happens at 50% is the real question.
Bitcoin CME Futures
The Futures chart, much like the Daily and Weekly charts for Bitcoin, has been relatively uneventful. A few small gaps here and there are like clockwork; they get filled. We have one of the most significant gaps we have seen in a while due to recent moves while the Futures market was closed. Now that Futures has resumed trading, we can see a relatively large gap to the high side. Ideally, one would like to see the two lower mini gaps get filled before a march north.
The Weekly still looks fine, but the Daily gives clues that may lead to the retest we have all been waiting for. As a pattern, Symmetrical Triangles are pretty reliable but also predicated on where they show themselves on the chart. If this could have been drawn from the local high, more credit would have been given to the pattern itself, but because it wasn’t, we take a lot of credit away from it.
Futures were likely to drop the price to fill previous gaps, so the drawdown is of little concern. The Weekly closed above the 236 as investors wanted, which is enough for some to look on the long side. However, one can never become complacent in theory and must be open to possibilities that go against their thesis, such as a drop back into the $25K area.
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