Top 5 by MCAP
Although this recap is mostly all about Bitcoin, it’s still important to discuss the overall health of the Top 5 as numbers 2-5 do have sway in the altcoin world.
Heavy downtrends are subsiding momentarily while short timeframe trends are beginning to develop. A little green is a welcome change in the see of red we have seen the last few weeks and the months of heavy downtrends beginning last November.
Bitcoin Monthly - Long-Term
Unfortunately, let us not forget that we have indeed broken our larger uptrend Support at $28,800 and we are now three pieces to the puzzle of a high time frame downtrend. This is why structure support and resistance (Swing-Highs and Swing-Lows) on high timeframe charts are so important. Every piece of a local uptrend is under full scrutiny unless we clearly start trending up and forming a solid level of support.
Bitcoin Weekly - Mid-Term
Eight Straight Red Weekly Candles. This is likely a record for Bitcoin since inception. Six in a row was already a rarity, let alone seven and now eight. Bitcoin Weekly did find support on our upward sloping trendline and it did close in the Support Zone that is still considered Support even though that Zone was brutalized the week before last.
Our Weekly trend, as opossed to our Monthly Trend is actually very much down and very much confirmed to be down. We have all four pieces of the puzzle. The good news is that these weekly trends generally do not last that long by the time they are actually confirmed but the bad news is that the Support levels are downward sloping, meaning, we have support that reaches a lower level every single week and at the same time, our resistance levels get lower and lower. Weekly High target is still in the $38K Zone while the Weekly Low is four-fold. The first Support level is the upward sloping trend and the horizontal support zone from which we are trading on currently. The second level is the downward sloping trend level. The third level is the Sweep of the previous low from two weeks ago and the fourth level is, sadly, the last major previous high at 20K.
Bitcoin Daily - Short-Term
Bitcoin Daily is showing mostly sideways action of the course of the last week, which, all things considered, is not too bad. Unfortunately we are developing potential pattern that leads to some really nasty downside targets but we are also maintaining support at the same time. Bulls are looking for a local breakout to be able to target the channel on a backside retest while the Bears are looking to rip out support and continue down.
Daily Bitcoin Volume
Volume is still relatively high posting higher volume than normal for the last three months. Nothing compares to last week with the LUNA and UST Black Swan event and the attacks on Crypto but average volume has soared in a relatively sideways market. This is interesting as we have seen decent swings for both sides of the Open. We would be expecting volume to die down a bit unless we see a breakout or a breakdown soon. A Breakout can bring in FOMO that the downtrend is coming to a close and a breakdown would likely bring capitulation as some traders are already on edge from the last big drop.
BTC Dominance has a huge move last week when the market sold off. This week we finally held the Resistance to Support ceremony for the 44.5% level that BTC Dominance has used a few times in the past and has been toying with every since the LUNA disaster.
The latest move does also pave the way for a trend on the Daily resolution. We officially have a Higher High that has maintained that level for a week. In fact, we are closer to two weeks than we are to only one!
Bitcoin CME Futures
Futures trading is all over the place and last week was a perfect example of just how wild these traders are. From Sunday night to Friday afternoon, the Futures market is open and trading, essentially 24/5. That being said, each New Daily Open brings more surprises. In a perfect world, we would only see Gaps from the Friday Close to the Monday Open as that is the only true pause in trading. That being said, nearly every single day we saw some decent Gaps in Futures. Worry not, every single one was filled as you can see from the white boxes.
We do have a new Weekend Gap and the candle tonight (Sunday) has opened higher than the close on Friday. Expect some initial downside action in Bitcoin until that is filled. Bloody Mondays are far too common these days and the traditional markets have been nothing but a weight tied around cryptos feet and they have looked terrible for quite some time.
A Bear Flag here would be dramatic but certainly not out of the question. Downside Measured Move would land us somewhere around $16,600. These are fairly common in downtrends and fairly common for Bitcoin. It would be over a 40% decline in price and would send traders to the nearest panic shop for sure.
A lot of this may have to do with the trraditional markets though. If Monday brings happy days to the S&P and the NASDAQ than maybe disaster can be averted. Again, this is nothing more than identifying a pattern that could potentially play out. Obviously, the Bulls want to make sure this does not happen, so they will need to actually step up their game for the first time in 6 months to prevent it.
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