Weekly Recap – 07-17-22

Top 5 by MCAP

Bitcoin continues its grind from sideways range to more sideways range.  Earlier this week we saw Bitcoin back in the $21K zone and then we fell back to the $20K zone.  Bitcoins’ Low for the previous week came in at $18,892 while the High was $21,667.  However, in the end, when all the dust had settled, the difference from Open to Close over the course of the last week was a whopping $58.91 loss.

Bitcoin Monthly - Long-Term

Bitcoin Long-Term Chart is showing green for July so far, and we are now halfway through the month and just a little over halfway through the year.  We are beginning our 5th week of sideways action at these levels, and the long-term is showing the first signs of slowing down the downward pressure.  This has happened before, so there is no need to get excited just yet, but it is something to be aware of at the moment.

Bitcoin Weekly - Mid-Term

Once again, we look to the 2017 ATH as our area of sideways action.  As mentioned previously in this article, we are entering week five at this level.  Technically speaking, we could say week six as we did need the price to come down here in the first place.  This area makes the most sense for heavy consolidation as it is a very important level that anyone who has followed Bitcoin over the last five years is well aware of.  The real question is whether $20K will be the “bounce” level or the bottom of this downtrend, or do we spend so much time here that we exhaust the support and rifle down to the next level… Stay Tuned.

Bitcoin Daily - Short-Term

While our Weekly plays around in the $20K area week after week, our Daily continues to drop from a trend line originating back in early April.  Yesterday Bitcoin reached up to get rejected for its 5th time on the same trendline.  What this tells traders is the real magic.  Even with the short-term action putting in consistent Higher Lows over the last several weeks, there is reason to be cautious of this particular trend as it failed on its much longer and more trusted trendline.  These areas are good for traders as they are the confluent factors they need to see broken in order to long this particular market.  In other words, most won’t take a long position until this trendline has turned from resistance to support.

Daily Bitcoin Volume

Volume is once again taking a sharp decline.  Last week showed five days in a row of decreasing volume, and four of those days were Buying.  Generally speaking, this shows less and less interest each day even though the daily closes above the day prior.  The overall average drop is posting about the same levels as a month ago when we had another sharp decline in volume.  The last thing this market wants to see is a decline in volume for the remainder of the summer.

Bitcoin Dominance

The BTC Dominance continues to struggle day after day.  What could have been a good level of trend support was indeed broken the following day.  We are now on Day two under the interim trend and getting closer and closer to our older Support Zone.  The biggest issue with the following local Support Zone is that it is less superior than the Zone underneath.  With the market the way it is now, we may not see any support given if we reach the first Zone.

Bitcoin CME Futures

Even if the rest of the market is boring, the Bitcoin CME Futures rarely disappoints in its action.  We had some new gaps get filled and we have left a few that need some attention.  Our partial fill on the low side remains messy.  Ripping the band-aid off would be ideal but that is not how this market always works.  Our most local gap to the upside is on the chopping block as a test of this trendline would fill the gap at the same time.

Conclusion

In the coming days, we will see yet another all-too-familiar FOMC meeting.  These meetings like to play with the market and cause pain to those who guess incorrectly as to what the Feds will do next to destroy the economy.  The trend goes like this:
Inflation increases
Rates get hiked to deter spending
Spending continues
No one gets the message
Everything gets more expensive
Inflation increases
REPEAT.

Now… what does this do to Bitcoin?  Well, just take a look at Bitcoin over the last eight months and you can see.  Bitcoin does not appreciate the Feds meager attempts to fix a problem they started in the first place.  Expect some volatility this week.  IF – IF we are to see some really dramatic moves then we can break out of this channel and head in one of the two directions that aren’t sideways.  High-side $28-29K and Low-side $14-13K.  

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