Weekly Recap – 07-03-22

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.  

These recaps are generally done after the Weekly candle has closed but this week it has been prepared a few hours before the Weekly candle has closed.  This will not allow us to see the Futures gap, if any, but outside of that, we have all the other information we need.  Let’s begin.

SOL, AVAX, MATIC… they all got crushed this last week.  Why?  Well, Bitcoin dropping yet another 10% most certainly did not help matters.  The one thing all three of the aforementioned coins have in common – they are all L1 Blockchains.  

Bitcoin Monthly - Long-Term

We have just completed the month of June and the results are in.  June was Bearish.  So, we now have three months in a row of Bearish price action.  We can see that there was two other times in the relatively recent past where we were left with three Bearish months in a row.  The first led to the new ATH and the second led to the only relief rally we have seen since the fall from the ATH.  Now, don’t get too excited yet as back in 2018 we went for 6 months straight with Bearish monthly candles.  That was the time we reached as low as $3128 and that level continues to be the low since 2018.

Bitcoin Weekly - Mid-Term

According to the Weekly chart, it appears as if the 2017 ATH near $20K is continuing to provide support for now.  We have very clearly traded below the 2017 ATH but not as aggressive as two weeks ago when we reached levels down to $17,567.  There is still plenty left on the table to the downside and the weekly close candle so far is anything but Bullish.

Bitcoin Daily - Short-Term

There is a lot going on in this chart but to simplify things down a  bit, mostly what we are looking at is pattern after pattern playing out, slowly over time.  The Bearish Head and Shoulders has just about completely reached its Measure Move near $16K and considering the pattern wasn’t developed until December 24th, 2021 and at a price of $51,878 – I’d say that is not too bad.  On top of the Head and Shoulders, we can see Bear Flag after Bear Flag after Bear Flag.  Some of these are very small while others are much, much larger.  The point is this.  There is some confluence down in some support areas if we are to completely break away again from the $20K zone.  $16, $12 and $8K are all on the chopping block if the Bears are to have their way.

Daily Bitcoin Volume

The good news is that we saw some relatively good volume over the last week.  The bad news should be predictable by now…it was all SELL volume.  That’s right.  All those volume nodes and the only thing to show for it was a 10% price drop in Bitcoin. Eight days ago we saw prices at $21,866 and only four days ago we saw prices as low as $18,603.  There was a lot of trading volume in-between those price levels and unfortunately they were all simply pushing the price further and further down.  All attempts, through volume and buying could not stop the Bears from breaching $18K.

Bitcoin Dominance

After Dominance had its dramatic fall the other week, things have been very slowly playing catchup.  We now see some alts that are taking less pressure from the market to sell down.  This creates a situation where the market is selling off but the Bitcoin Dominance does not rise.  These are Bearish times on all accounts but even more so when the dominance does not see the capital from other investors.  This is has become more and more of a great reset in crypto wealth as opposed to just a simple Bear Market.

Bitcoin CME Futures

If you recall from a week or two ago, Bitcoin dropped down into the $17’s but recovered to close above $20K before the futures could open it’s doors.  That means that coming back to those levels to help fill the gaps was almost in the cards.  Sure enough, we saw some action last week that left us with a partial fill for a gap that has been on the chart since December 14th, 2020.  Not bad at all.  With the 4th of July coming in America, the futures exchange may actually be closed this Monday.  Regardless… Futures will be looking to fill these gaps at some point or another.

Conclusion

Nobody wants to hear the truth but the truth is that we have yet to see and conclusive or compelling data that has shown a change from the downward trend.  What does this mean?  It means that the momentum is to the downside and until we see some type of catalyst or some kind of emotional change in Buyers than we are likely to continue to see more downside action.  

The most recent Rising Wedge can potentially bring us down to the low $17K’s but the Bear Flag that the Rising Wedge is part of tells a much more sever story.  The downside for that pattern to play out would land Bitcoin just barely below $7K.  Now, that may seem extremely dramatic but consider $20K to $3K back in 2018 and then ask yourself if that too was dramatic.

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