Weekly Recap – 09-11-22

Top 5 by MCAP

Hang onto your hats because we actually have some GREEN in the market! Now, don’t get too excited too soon as there is a good chance the pump is already over but let’s take a look anyway and see what we see.

As for the Top 5, the Hourly Trend is trending up for all five of them. ETH is edging everyone else out with strong trends reading up to the H6 and Bitcoin is currently showing the strongest low timeframe trend.

Bitcoin Monthly - Long-Term

The Monthly chart keeps everything in perspective. Until we flip the top side of August and turn that overhead resistance into Support, there is little to be excited about. Be that as it may, we are getting extremely close to testing the downward trendline and shifting the market in a more positive direction.

Bitcoin Weekly - Mid-Term

You can hear the Weekly Bulls cheering already… ” We reclaimed $21K!!! It’s ours!!!”

Well, the Bulls have put their heads together and collaborated on a Weekly Win. They managed to muster up enough buying to offset all the selling throughout the week and come through BIG for the end of the Weekly Candle. When the dust settled, the Bulls left the chart with a Weekly Candle over $1800 positive from the open. They also managed a close above $21K, which was a pivotal level we spoke about last week. A backtest of $21K would not at all be surprising but if it holds on a backtest, that could absolutely get a lot of traders back involved with bitcoin.

One major thing to keep in mind, and we will focus on this for the Daily CHart, is the overhead downward sloping trendline from the ATH and the initial Swing-Fail at $48,240. Even a push all the way up to $24K can result in a shorting opportunity for a lot of traders.

Bitcoin Daily - Short-Term

What a time to be ALIVE! The initial loss of the $21K – $19K Zone only lasted for a single day. The Bulls came back hard the following day but then took it easy on the second day. However, Day three was a day to remember and one to jot down in the record books. Friday was a $2000 candle kind of day. The candle on Friday broke through the mini-range zone as well as downtrend structure resistance. This is a really big deal for trend traders as this is an acceptable time to get long on a trend with a speculative position. 

The immediate overhead resistance will keep many traders from entering any positions, however. The next area to contend with, which is a really important one, is the downward sloping trendline from the ATH. Once we are over this level, trend traders will surely go long. This absolutely doesn’t mean the downtrend is over, but it’s certainly a simple trade with clear entry and exit levels.

We will look to see if the Bulls can continue the upward march and make their way over the trendline. If they are to fail near the trend, then we are likely to see a lower low and test the action from June near $17K.

Daily Bitcoin Volume

For the last four weeks or so, Volume has been ever so slowly on the rise. This is good news and bad news. For most of that time, Bitcoin was actually dropping in value, and the rise in volume would mean that sellers were getting more and more aggressive in their selling. Two or three days of positive price action cannot take the credit for the rising volume, and therefore we are left with a Bearish outlook as far as volume is concerned. If, however, we can continue in an upward trajectory on volume while also increasing the value of Bitcoin, then we will very easily be Bullish, if nothing else, for the short-term or until major overhead resistance has been cleared.

Bitcoin Dominance

Like the Energizer Bunny, the Support just keeps on holding. Granted, we absolutely lost support for a little while but that is not uncommon as we go back and look at the last few times we utilized this zone. That being said, we have also seen in the past a drop to this zone, a pump, and then a return back to this zone before yet another pump. So, be aware in case we are headed back into that area shortly.

Bitcoin CME Futures

The Bitcoin CME Futures Gap Chart – everyone’s worst fear is that this pump is fake, and we come back harder than ever. There is a chance that this is indeed nothing more than a Short Squeeze. This would effectively reset the leverage tables as it liquidates all late shorter and allows fresh capital to be short with better entries. The opening of this candle has left a small gap from the Friday close. We also have a ton of gaps to clear that are well under $20K.

Conclusion

The Bulls are making a statement and the world is responding in a good way. This si a good “feeler gauge” for the rest of the Crypto Market. Sentiment can change on a dime and it usually only takes one strong candle and a short follow-up, especially when people have gotten their faces smashed in for nearly a year already. It’s hard to believe that we have been in a downtrend since November.

Bitcoin will need to challenge the downtrend and that happens when it reaches the trendline that has been formed using the ATH and the initial Swing-Fail. Historically, the first touch is almost always rejection and further downside. Time will tell of course, if this time is different. If there is rejection then we look to retest the lowest lows from June but if there is a significant break of the trendline and we flip bullish, then all bets are off and we ride the Bull trend as long as possible.

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