Weekly Recap – 06-19-22

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.  

Hang onto your hats ladies and gentlemen because oh what a week it has been.  We had FOMC meetings with the largest one-time interest rate increase in decades, we had Saylor from Microsystems being targeted for liquidations, we had Celsius being targeted for $200M in liquidations and we had 3AC also on the ropes for liquidations.  We had massive downward price action followed by equally impressive northern price action.  So, there is a lot to get into.

Firstly, we can see that we are showing very short-term positive price movements for our Top-5 coins.  We can also see that we have dropped below $1T total Crypto Market Cap and that is with roughly 14,000 Cryptocurrencies on the market.  Next, we can see the Fear and Greed index is a 6.  We have only been this low once before but it should be noted that the Fear and Greed index does not have data before Feb 02, 2018.

Bitcoin Monthly - Long-Term

This should be no surprise by now but Long-Term still does not look good.  Why?  All the Support structures that were in place have been tested and failed to maintain support.  All momentum continues to be to the downside and we have yet to see any signs of seller exhaustion – in fact, quite the opposite.  The Sellers continue to rally and the pain is beginning to set in for the buyers who continue to try to catch the proverbial falling knife.

Bitcoin Weekly - Mid-Term

I get it… Everything is red!  The thing about support levels are once they fail, they become resistance levels and everything since $69K has failed so far.  We are actually running out of Support Zones.  $20K can technically remain support at the moment because the Weekly was able to recover from it’s $17,567 low and close the Weekly at$20,552.  This was actually a major failure for the Bears and a HUGE victory for the Bulls.  Defending the 2017 ATH sends a clear message to the Bears that the Bulls have seen enough and they are ready to fight.  The question remains, did the bulls only win on Weekend Volume and thinner books?

Bitcoin Daily - Short-Term

Bitcoin Daily is showing levels we didn’t think we would be talking about for a long time but… here we are.  The H&S back from the ATH at $69K and the initial Swing-Fail at $52,100 had a target of $16,038.  That is a $27,540 loss from the break of the neckline back on January 6th, 2022.  Over the weekend, we were less than 10% away from reaching that target level.  It would have only taking another $1500 or so from the low on Saturday.

The extended Bear Flag from the recent consolidation in the $28,500 – $30,500 zone has a downside target of $16,218.  We also have very old but very important horizontal levels starting at $13,868.  

In other words, we have a lot of reason to see more downside BUT in the short-term – we may very well see consolidation like what we saw above at $20K.  This is a very important area and there is a lot of reason for some back and forth trading within this zone.  There would be little surprise if we stayed in this area for a month.

Daily Bitcoin Volume

Monday broke some 2022 volume records and as expected, it came from more sell-offs and liquidations.  We are seeing a lot of lending and DeFi protocols that are using Bitcoin as their main collateral literally getting hunted for their liquidations.  The good and bad about the blockchain is that most of this information is readily available.  You want to liquidate a billionaire?  Sure… Get enough people together to drop the price of their value as collateral.  BOOM.  They either need to add more of their devaluing asset or they get liquidated for their original position.

Bitcoin Dominance

Dominance sent yet another chilling ripple through the crypto waves as we saw Bitcoin get denied from 50% and test its previous area as support… Support failed.  Even the area below that failed as well and now Dominance is struggling once again for 44%.  The thing about this is that Alts are NOT on the rise.  So, Bitcoin Dominance got REKT and took the entire market with it.  To make matters worse, the entire Cryptocurrency market is now valued less than $1T.  A Sad day across the board.

Bitcoin CME Futures

Although speculation and skepticism is always at the forefront when speaking of gaps, we continue to talk about them because they are relevant and they fill well over 90% of the time.  On Monday, the Futers dropped over 23% from their close on Friday.  This filled a huge gap that was left a long, long time ago from $26,080 down to $23,685.  There were also Gaps from Mon-Tues, Tues-Wed, Wed-Thurs, Thurs-Friday and last Friday to today and they have all been filled as well. 

The highlight here was another long standing gap that has finally been filled.  The Gap dates back to 12-17-2020 and was left while Bitcoin was making irrational pump moves from $18-42K.  So, what’s next?  The next major gap for CME Futures to fill $19,080 – $18,020.  It should be noted that we did trade these levels over the weekend but the Futures platform was already closed for business.  It would seem clear that we will revisit those levels again, despite opening at $20,390 today.


The dreaded $1360…

Nobody actually wants to hear these numbers but the truth of the matter is, the market will do what the market will do.  If irrational behavior leads the market and the world is irrational then expect to see more irrational trading.  The truth of the global economy is the more the feds fight off inflation by raising rates to curb spending then the more and more investors and traders alike will risk-off or sell positions and exit from markets.  

There is a chance we are seeing the largest reset in the history of economics but we can save that for another day.  For now, we look for consolidation and further downside until we see a clear sign of a potential reversal.

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